Health insurance - changing cost structure for employees
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Is there a required notice that you need to give to employees when you are changing from not charging the employees any contribution for their health care to having them pay towards their insurance coverage?
Comments
Unless your company has a collective bargaing agreement in place that states that employees don't have to pay for their health insurance I am not aware of any laws requiring notice to be given to employees when changing company policy.
Clearly the employees will see this as a reduction in their beneifts, which it is. However, I would try to explain the rationale behind such a move and hopefully the employees will see that there is a sound business need for such a decision to be made. Good communication is the key to avoiding a potential loss in employee morale and productivity.
I would go out and find the surveys done on how much employees are paying nationwide for insurance as it sounds like even with having the employees contribute something, they should still be below the national average.
Two major reasons:
(1) If you are going Section 125 pretax with the deductions, then yes, you have to give them notice and have them fill out an election form during "open enrollment" to authorize the deduction from their check. You also need to explain to them what a "qualified event" would be for changing their benefit choices under the 125 midyear (birth, death, loss of coverage etc). Note that an employee can waive the Section 125 benefit (pretax) and then the changes just depend on your contract with the carrier and what it allows. There are benefits to both the employer AND the employee for setting the premiums up under a 125 plan -- neither have to pay FICA on those amounts.
(2) Besides that even if you don't go Section 125 pretax and take all the deductions post tax, many states' wage laws require a written deduction authorization to take the deduction from wages.
And then the morale reason noted above....why surprise employees?
You might also look at any previous communications to make sure you haven't done anything to promise employees that their premiums would be paid for the plan year already in effect.