Free Choice Vouchers

What are free choice vouchers?

An employer that offers health coverage to its employees must provide free choice vouchers to each “qualified employee”.

What is a qualified employee?

Qualified employees for this program are employees:

  • who do not participate in a health plan offered by their employer;
  • whose share of the premium costs required under employer plan exceeds 8% but is less than 9.8% of their household income; and
  • whose household income is less than 400% of the federal poverty level.

How large are the vouchers?

The amount of a voucher is equal to the largest portion of what an employer would have paid for the individual’s coverage in the employer sponsored plan.

Do employers have to pay penalties for lack of affordable coverage in addition to offering the free choice voucher?

Employers that provide vouchers are not subject to penalties for employees who receive premium tax credits or cost-sharing reductions for coverage in an exchange.