Charging a higher medical premium?
durasupreme
68 Posts
The Prez of our company is adamant about implementing this program with the 2006 insurance renewal: Charging a higher medical insurance premium to an employee who's spouse has medical coverage available through their own employer, but they prefer to be covered under our policy. Do other companies do this, and what kind of administrative difficulties, if any, have you experienced? Our insurance broker has indicated that (in his opinion) it would be a lot of work for little gain, and would be negatively received by the employees. Yet our Prez is quite adamant about saving money in this way. Our company is doing very well financially. To implement this program would actually mean some ee's would still have to pay a family premium if they have 2 or more children on the plan, and their spouse would also have to pay premiums for their own coverage, thus costing them more money. Apparently ee's would have to sign an affidavit stating their spouse DOES NOT HAVE other coverage available to them. I see this as being administratively burdensome, a defeat to employee morale, and potentially lead to terminations if the ee lies re: the availability of coverage to the spouse. Can you share success or horror stories, or your company's experiences? We are a manufacturing company of over 500 ee's.
Comments
In fact, ees with working spouses should be paid less than other employees, based on your boss' logic. :~~ And don't forget to factor in their kids' summer jobs!
I hope your prez announces this new policy in a company meeting. Please videotape it and send me a copy. x}>
James Sokolowski
HRhero.com
I don't know anyone who's doing this, but, in general, I've always thought that each employer ought to 'carry their own load', in other words, provide insurance at least on their own employees. That said, with today's cost and coverage differences, it would be tough to force an employee's spouse onto their own plan which is substantially lower in benefits and higher in cost than keeping them on our plan, but, of course, if our employee was already paying for family coverage, it would be secondary to the spouse's plan and the benefits levels would be equivalent. Tough choice.
Go for it, and tell the rest of us how it works out.
A better way would be to offer an incentive (read $$) to opt out of his plan and into their spouses plan. This is then the employee's choice. Works for us.
By the way, we're the same corporation that makes it's employees submit proof of dependents relationship before we will add those dependents. Our corporate experts say this has saved us over a million and a half dollars since it was installed two years ago.
Visionary indeed. These are just two reasons why our group policies are so competitive and premiums are excalating at a much slower pace than most and part of the reason we continue to be an $8B corporation.
On the other hand, employees and spouses who went online and participated in a personal health evaluation program got monthly discounts of up to $30. The exercise was confidential and took about 13 minutes and many decided it was a waste of time. We push that just like we do our EAP.
Proof of relationship .... I'm assuming a birth certificate for a child. What do you do if the last name is different? How far do you pursue this? Your input will help me sell this to our VPs.
Spousal Employment Verification Form has multiple questions and required a confirmation signed by a representative of spouse's employer as to ineligibility for other coverage. And states misrepresentation is cause for termination.
We have four types of plans available with different costs, deductibles, etc.
EE plus two or more:
Plan A total cost per month $1085
Employer pays $932
Employee pays $122
Includes discounts for choosing standard prescription option and for participating in the healthy people audio/video computerized program.
The $122 above, becomes $430 if spouse declines other coverage.
In my case, ee plus spouse, Plan A:
Total cost per month $641
Employer pays $541
Employee pays $76
Includes discounts as stated above.
If my spouse declined the coverage available at her job, my monthly cost would rise from $76 to $377
So, as you can see, if I had a spouse and 5 kids (or any number) the coverage would cost me $122 per month. I don't find many plans that match or beat that with $150 deductible and $1000 out of pocket.
No, Section one of the form goes like this:
Are you opting out of the plan? yes no
Are you married? yes no
Is your spouse employed? yes no
Will your spouse be covered under our medical plan? yes no
Does your spouse work for us? Yes No
Section two asks for name, address and telephone number of spouses employer, whether or not spouse is full time. Then gets into the questions about whether coverage is offered and whether spouse is eligible, and if so whether enrolled. Etc.
If the spouse is either not eligible where employed, or unemployed, spouse is allowed to join our plan just as any other dependent without penalty.