Mandatory Contributory Benefits Options

[pdwinter]

There are mandatory contributory 401k's. Have you seen mandatory contributory medical plans where as a new employee you must participate and contribute unless you can prove other coverage? It would solve participation issues at some employers.

[vebaguru]

Post #1. You joined the board to ask this question?
Why would it solve participation issues? By giving the employer an excuse to sack cheap or broke employees who cannot afford to pay their share of premiums because they live hand to mouth?
Do you really mean nondiscrimination issues?
Or what types of participation issues? Too many participants are under the employer's plan? The employer wants employees to participate in their spouses' plans rather than its plan?
As any good group health insurance broker knows, every employer can decide the level of its commitment to a health plan, including:
1. No plan at all.
2. A buy-in plan where employees pay 100% of the premiums.
3. A plan where the employer pays some of the employee's premium and the employee pays the balance.
4. A plan where the employer pays 100% of the employee's premium and the employee pays for dependent coverage.
5. A plan where the employer pays 100% of employee and dependent coverage.
6. Variations on the above.
My firm selected #4.

[dsw713]

If an employee waives coverage on our plan, we ask to see proof of other coverage. I do have a case of an employee who has waived coverage for himself and his dependent children are on a state-funded medical program. We provide an incentive for employees to waive our coverage and when his spouse lost coverage, he did not want to give up the incentive. I don't know where I can force an employee to be covered under our plan if they do not have other coverage. But in talking w/my HR network, I am finding this more and more common. The downside is that it has taken our group just under 100 lives on the health care plan, which is not advantageous for securing group insurance.

[Don Levit]

dsw713:
Your case is an interesting one.
I assume the employee must pay part of the premium.
If it was 100% paid by the employer, would his refusal be valid?

On another note, I have been told by many agents that several insurers will not count individual policies as valid coverage for participation requirements.
In effect, they are considered uninsured.
Any one have a similar experience?
Don Levit

[taylorjeff]

I am unaware of any employer plans that are mandatory and require an employee contribution. I have seen cafeteria type plans that required the employee have other medical coverage before being allowed to allocate the employer contribution toward some other benefit.

The only groups I've seen that had got themselves into serious trouble were some school districts that offered an annuity to those who didn't elect medical. In order to boost their participation percentage, most have discontinued this offer for new employees.

Don, most carriers we work with will count employees covered thru their spouses' group plan as a vaild waiver but not those with individual insurance.

[Don Levit]

Jeff:
Thanks for your reply.
Are you aware of the reason insurers use to not count individual coverage?
Does this not qualify as "creditable coverage," particularly if the individual policy is fairly comprehensive?
Or, is this restriction part of the state insurance codes?
Don Levit

[masteff]

See this recent, similar thread which contains at least one personal experience w/ mandatory participation.

Edit: helps to actually paste the link: http://benefitslink.com/boards/index.php?showtopic=43433

This post has been edited by masteff: Oct 26 2009, 02:06 PM