plan coverage options

[CEB]

I have been hearing about companies that have two different health plans based on service. A new hire goes into one plan for the first year and on their anniversary they move into a more generous medical plan. Do any of you have clients or does your plan work this way? I was wondering what the pros/cons are for this type of plan structure?

Also, do you have any clients that have employees on a generous (aka media called "cadillac plan") but have dependents on a less generous plan? Is that even possible to have dependents on a plan with a higher deductible. If so, what would be the pros/cons?

Thank you

[Guest dsw713]

I like this type of creative thinking and I think we are going to see this more and more. Not sure if there would be a discrimination issue, but you can set up different coverages for different classes. I do not know of any employer that is providing a "cadillac" plan to any of it's employees.

[oriecat]

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[Guest jackmo]

DSW--if you haven't seen any cadillac plans, look around at some of the smaller municipalities and utilities.

Re companies that have 2 different health plans based on service: Possible cons: 1) If self funded, then potential anti-discrimination problems IF HCEs are all in the "good" plan and most of the NHCEs are in the 1st year plan.

Re one rich plan for the employee and an economy plan for his dependents: The pro is less employer cost for dependent coverage. No cons.

There's another way to do this same thing--put in a high deductible health plan that the employee can get himself and his dependents on. Then write a MERP that reimburses only the employee's deductible (not the dependents) down to a lower level.