Can we provide benefits for part-time employees but not all part-time employees?

[Guest cosmo01]

We have a situation where we have some full-time employee that wish to become part-time, but only if we are able to continue providing health benefits. We currently do not permit part time employees to participate in our health plan and do not want to open the plan to all part time employees, just those part time employees who are currently full time. We envision that these individuals will not have a set number of hours to work in a week, just on an as needed basis. Does anybody have any suggestions?

[jsb]

Will the person still receive benefits if they only work 8 hours a week, or per month? If you are insured, will your insurance contract(s) permit such loose eligibility? Are you willing to give your worst employee the same deal?

[maverick]

Cosmo, insurance companies call this adverse selection. Basically people are only working so they have health coverage. Check your policy definitions as suggested by jsb; coverage may only be available to ees who work more than xx hours. Also, if you only let former full-time ees in on this part-time insurance deal, and it gets out, you'll have a huge morale issue.

Signed, a former group health ins. underwriter.

[oriecat]

Yeah, that sounds like a messy deal to me too. I don't think it would be wise to get into a situation where some parttimers have coverage as an active employee and others don't.

However, I think one way to get around that would be to terminate their coverage, send them COBRA information, tell them to sign up and that the company will pay the premiums for them for the 18 months. Of course, then 18 months down the line, if they are still there and still part time, then you again have the same problem of how to deal with them.

[mroberts]

I think it depends on a variety of factors:

1. How many total employees are on your health plan? If you only have 25 and you want to include 3 part-time employees, your health insurance carrier probably isn't going to say yes. If you have 500 employees and want to cover 3 former full-time employees, then the carrier shouldn't have any problems.

2. As maverick points out, there has to be some parameters on what is defined as part-time. Most health insurance carriers probably won't put up a stink if each of these employees is still working at least 20 hours per week. But if it's 20 hours per month, that's a problem.

3. How many other part-time employees do you have? How does this number compare to total employees? Again, as maverick points out, it's not worth hurting morale for the sake of a couple employees.

My first inclination would be to say no, but you'll have to decide on how valuable these employees are to your company and what the carrier can do to accomodate your needs.

[Kirk Maldonado]

Aren't those employees entitled to elect COBRA?

[mroberts]

Yes, but as oriecat points out, you come back to the same issue in 18 months. If you know these employees are only going to want medical insurance on a short-term basis, then COBRA would suffice. However, if these employees want to be permanent part-timers, it's better to deal with the situation now rather than later.