Health care question
pijanowski
3 Posts
I have a single employee, currently enrolled in our health plan, who is getting married to someone who does not work with us in April. He wants to drop our health insurance group plan in favor of joining his bride's when he gets married. But he has asked our business owner if the boss would be willing to pay his new wife's monthly premium. He's arguing that it would be cheaper for the company to do this instead of carrying him and his wife on our health care, and our boss likes the idea
Is this legit? Or are we going down a road we don't want to travel. I'm not an HR expert, just the poor guy assigned to these duties in the office, and I really could use some guidance.
Thanks
Comments
I have read this several times and must admit that I do not quite get the picture. Sorry if that means I'm dense. [:P]
The EE is dropping out of your plan.
The EE will join his brides health plan
Yet the EE wants your company to pay for the brides coverage for a plan outside of your company.
Is that it or am I missing something?
Essentially what this would boil down to would be your company giving your employees a raise in the amount of the wife's insurance as you wouldn't be able to actually pay her insurance at her company. I can't see any problem with it, outside of it opening this opportunity to all of your employees. Not just medical but if a spouse's dental, vision, disability, etc. is less expensive then they could ask for the same treatment.
It sounds like either your employee only coverage is very expensive or her insurance is very inexpensive. To have an Employee + 1 coverage be less than Employee Only is pretty rare.
There are company's that provide compensation for benefits and allow you to keep some of it in regular pay if you can show that you have health coverage of a certain, minimum level. It's added administrative hassle and difficult to police. There's nothing stopping the person from then taking themselves off insurance and denying affordable access to medicine, which is supposed to supply you with a healthy employee.
If you aren't equipped to do this for everyone in your company, I would say don't do it. You may actually be required to give the same option to everyone if you do it for one. I'll leave that to an ERISA expert.
[quote user="pijanowski"]You got it. And my CEO likes the idea because instead of paying $1,500 a month in health care on our plan we would pay $600 toward his wife's premium.[/quote]
Wow! Contrary to a couple of others I have never heard of such a thing. My first instinct was that I would not do that but I really did not have a reason why just that it did not sound like a good thing to do. TX and LH both gave a good reason. Anyway I appreciate the exposure to something new, at least to me, in the HR world.
I have heard of companies paying a certain $$ amount each month to an employee if they are not covered by the employer's health plan. You can look at this two ways - 1.) You may save some money as it may cause some people to drop your coverage (especially if your plan is expensive) and go on a spouse's plan. 2.) It may cost you more money because you have people that didn't have the insurance before (and so you weren't paying anything for them) that now want this $$ since they don't have the insurance. You have to look at how many people accept your insurance and what the $$ looks like.
What I don't know is how this money is given to them. I don't know if the person is taxed on the money they get from the company.
I figured so - just about everything is taxed now!!
We're a small company (less than 50, in CA) and we've had similar questions from a few of our staff members. While we considered it, in the long run we decided not to do it. In each case it was cheaper for the employer and our company. We understood that we would need to offer this option to everybody and the bottom line was we didn't want to get into managing it. The last time this came up was during open enrollment/ fee increases. One of our employees found a family rate for a plan he was fine with that was about the same as we could offer for him + child(ren).
One concern would be if you are a small company, how many participants are in your healthplan and would you be getting close to losing any "group" plan savings?