1. Unconditional Opt-Out Payments - The employee waives coverage and is not required to provide proof of other coverage (whether through documentation or attestation) when waiving group health plan coverage to receive the opt-out payment. This opt-out payment would need to be added to the plans ACA affordability calculation. 

1. Eligible Opt-Out Arrangement  -The opt-out payment must only be available to employees who decline employer sponsored minimum essential coverage.  The employee must provide reasonable evidence that they and their “expected tax family” have or will have minimum essential coverage (MEC) other than individual marketplace exchange coverage (e.g., under a spouse’s employer’s plan) during the plan year covered by the opt-out arrangement. Employees can have Medicare Part A, CHIP and most Medicaid and TRICARE plans.

It is important to note that “reasonable evidence” of other coverage can include the employee’s attestation of other coverage for employee and expected tax family (other than individual marketplace exchange coverage). Also, there is no requirement that the employer require any proof except an attestation from the employee. The employee and expected tax family must attest to having other coverage annually and the attestation can be obtained during open enrollment or the employer can allow employees to provide proof after the start of the plan year.

Eligible Opt-Out is the only type of arrangement where the opt-out payment would not increase the employee’s cost of coverage and would therefore not need to be added to the plan’s ACA affordability calculation.