Can you do this?

[Guest jrzgrl]

With the new plan year, 1/1, my employer wants to do away with the 75% it pays towards EE's premiums. Instead, they want EE's to pay 100%, while increasing our gross pay to make up the difference. Are employers required to pay some portion of the premiums with group health plans?

[QDROphile]

No. Your employer should should consider a cafeteria plan to get the maximum benefit out of the same dollar outlay. If you employer has a cafeteria plan and has increased your pay by the difference in the premium, you are no worse off except possibly for wage witholding that does not follow the federal model.

[Guest Gompers]

Thereis no law that I know of requiring an employer to pay a certain percentage. Buti if your benefits are fully insured, the insurance company may have a contractual requirement that the employer pay a certain percentage of the cost of single coverage. If this is the case it is possible that your employer is unaware or is ignoring any such requirment.

If you are a small company (50 or fewer employees) then insurance companies that offer coverage to small market employers must, by law, offer coverage to all small market emloyers generally at "community rating" plus or minus a specified percentage. Recognizing that if you go to an employee pay all plan with no employer payment toward the premium there may be signifciant adverse selection, there might be a provision in the state law allowing insurers to require as a condition of providing insurance that the employer pay a certain percentage of the single premium. Of course the insurance company is not required to put this provision in its agreement but many such agreements with small employer require that either the employer pay a certain percentage of the premium or alternatively require that a certain percentage of employees actually take coverage.

[Guest b2kates]

I agree with the 2 previous posts.

Simply, yes an employer may require employees to pay all. remember that an employer is not required to sponsor a health plan.

State law may require small employer groups to have some percentage paid for by the employer.

[Guest Joe D]

Not yet. Maryland and a few other states recently tried to pass legislation to do that, but eventually it was done away with. I'm sure if your state was one that tried it you would have heard about it.

[Guest jrzgrl]

Thanks so much for all of your feedback!

[Guest b2kates]

new jersey requires a portion to be paid for by the employer in a fully insured small group plan. It is an insurance contract rule so as not to violate ERISA preemption

[Guest Gompers]

Joe D,

I think we are talking about two different things. One is the state, by law, mandating that an employer pay a certain portion of health insurance premiums. These "Wal-Mart laws" are controversial and not common.

The other is an insurance company, by contract, requiring the employer to pay a certain share of the premium if the employer wants insurance from that insurance company. This is realtively common and the only law that comes into play is the state law that allows the inurance company to put in this contractual requirment.

[Guest jrzgrl]

Yup and I just confirmed that our insurance company does require an employer contribution to qualify as a group plan. I have passed this tidbit to my supervisor and we'll see what happens...

[Don Levit]

You may want to consider an employee-pay-all VEBA.

Don Levit

[Guest Ira Hayes]

Making healthcare 100% employee contributory poses significant underwriting issues if fully insured. Those who elect do so adversely; hence additional risk passed onto employer directly (if self funded group helath benefits provided) or indirectly (increased premiums if underwritten at all).

[Don Levit]

Ira:

I agree with you that the 100% employee pay merely entices those who anticipate claims to buy the insurance.

One way to address this issue would be for the employer, or employers in the same line of business, to offer an employee-pay-all VEBA.

Not only can this address adverse selection, but also discrimination as well.

Benefits can vary in direct proportion to premiums paid.

Don Levit