Employer Reimbursement

[Guest NGP]

I am a small business owner in Washington State. We have two fulltime employees who receive medical insurance through either their spouse or parent. I have been told that I am required to reimburse them monthly in the same amount I pay for my other employee's premiums ($462). Is this true or could I reimburse the amount they pay toward their current insurance? Am I required to provide any reimbursement?

Thank you for any help with this.

[QDROphile]

First you have to understand what your health plan requires. Does the employer or employee choose the insurance? Are you allowed to exclude on the basis of other coverage, or are the employees allowed to opt out? Does the employer pay the full cost of coverage, or is the $462 a fixed amount that is a portion of a greater cost that the employer pays? The employer must follow the terms of the plan. The plan is more than the insurance policy and will include how the premiums are paid. It is possible the the funding is is under a cafeteria plan (section 125 plan), so the terms of that plan must be considered. Your post does not suggest that you have a cafeteria plan. If the employer is not required to cover the two employees, you still have to consider employment policy. Health benefits are part of compensation. What is the appropriate compensation for the two employees? If the employer is not compensating by providing health coverage, should that compensation be made up to the employees in some amount in some other way?

[GMK]

... should that compensation be made up to the employees in some amount in some other way?

NGP - some employers do, some don't. Your choice.

As Mr. Q says, check your health plan document (not the insurance policy) and the cafeteria plan document, if any. Also check whether state laws require something like this.

Might be quickest to ask the person who told you that you have to reimburse these two employees why she/he thinks that is so.

[Guest NGP]

Thanks to both of you. I am a new partner to this business and it's the way "we've done it", but I can see I have a lot more to look into. Thanks again.