A Returning Employee Who Declined
If a continuing employee comes back during a stability period after declining an offer for the whole period, you are still treated as having offered coverage. You need not make a new offer for the rest of that period.
The three things to know.
The Offer Stands
An offer that the employee declined for the stability period continues to be treated as made, for penalty purposes, through its end.
Why It Helps
Employees who leave and return within the period do not force a fresh offer or a new risk of a payment.
Where It Stops
The rule covers the same stability period. A new stability period needs a new offer.
Sources: 26 CFR § 54.4980H-3. General information, not legal advice.
A worked example.
A Waiver That Carries Forward
An employee found full-time declines coverage for the 2027 stability period, leaves in June, and returns in September with a gap of 13 weeks or less.
What the Rule Produces
The employer is still treated as having offered coverage for the whole stability period, so no new offer is needed for the rest of 2027. A fresh offer is made for the next stability period.
Four steps to apply it.
1. Keep the waiver
Store the signed declination.
2. Record the break
Note the dates of departure and return.
3. Skip the new offer
Do not re-offer within the same period.
4. Offer next period
Make a new offer at the next stability period.
Where it goes wrong. Dropping a waiver from the file, which weakens the proof that coverage was offered.
The questions that come up next.
Does the employee have to be re-enrolled?
Not for the mandate test. Plan rules may still allow enrollment at defined events.
What about an employee who left?
If the break meets the rehire rule they are treated as new. If not, their prior status continues.
Should we record the declination?
Yes. Written waivers support the position that coverage was offered.
What if the gap was longer than 13 weeks?
The employee may be treated as new, and the rehire rules apply.
Can the employee enroll mid-period?
Plan terms decide. A qualifying event may allow it.
Plan-specific questions belong with ERISA counsel, and we will bring them in.
Related pages on the look-back method.
Restaurants and Hospitality
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Retail
Holiday spikes and seasonal hires create a workforce that looks full-time for eight weeks a year.
The Full Look-Back Guide
Every rule, example and source behind this page, in one place.
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