Health Insurance Benefits

[Guest jcuadra]

Are there any laws or codes governing the arbitrary offering of health Insurance benefits to employees as well as arbitrary waiting periods for each employee of the same company. Once an employee is given Insurance benefits is the employer committed to offer the other employees in his company the same benefits.

[KIP KRAUS]

ERISA requires that any medical plan covered by ERISA must be administered so that it precludes individual selection. Therefore, if you establish eligibility you must do so in a manner that it precludes individual selection. In other words if the eligibility is full time employees who have worked for the company for I month is the eligibility you can’t require some employees to wait 2 months if they are a full time employee.

This is a simplistic answer I know, but use common sense.

Having said the above, most group insurers require employers to establish legitimate eligibility requirements and adhere to them. Insurers cannot allow picking and choosing in their group plans by state law.

On the other hand, if the employer is providing some sort of individual (non-group) medical coverage he can do what he wants to do.

more details would be helpful.

[Guest jcuadra]

Thanks Kip,

Here are some more details:

The employer I am speaking of has set up a group health plan and pays the full premium for himself and a select few others of varying levels in the company. He has hired a few more people and now says that he is not going to pay for their insurance and if he does he will only pay the employee's portion in 3 to 6 months. When confronted about the inconsistency he stated well its either the insurance or their job.

Seems to me he has broken many of the rules regarding fair treatment in employment.

[mroberts]

Seems to me that he has to put something down in writing as to how he is determining who's eligible, when they are eligible and how much is going to be paid towards their medical insurance. Is it possible the employees he's paying for medical insurance now are all in management? Is there some class distinction or is it completely random. Even if it's years of service, that can be used as a distinction.

It sounds like the hiring of some extra workers is what can be driving this, since he would now be paying substantially more for insurance than what he thought at the beginning of the year. But I would assume an increase in workers would usually mean business is good and adding some medical insurance could go hand in hand.

[jeanine]

If he's providing insurance under a group health insurance policy you may want to check your state's insurance laws. Start with your state Department of Insurance. In Ohio, a small employer must offer coverage to all its employees who work full-time (defined as 25 hours for a small employer). It's important to realize that insurance law differs from state to state.

[KIP KRAUS]

Jeanine is absolutely correct. The insurer needs to know what’s going on. I’ll bet they don’t know he’s doing this kind of individual selection. I’ve seen this mentality in small businesses before where the owner feels he can do what ever he wants to do, but there are laws that regulate group insurance plans and how they are set up as to eligibility and group insurers are required to underwrite their plans in accordance with these laws.