Which part-time employees get health insurance?

[Guest mitchelo]

My question has to do with part-time employees and health insurance offerings:

What are the specific rules under ERISA and/or IRS nondiscrimination regs, about employer offering of health insurance and/or participation in said plans, by employees that work less than full time?

**Are there any hours thresholds (eg Lt 20, 20-34, etc) that apply for part-time employee health insurance coverage?

**What are the hours thresholds, if any, and what participation rates have to be achieved?

**Where can we look for further information?

Many thanks.

[KIP KRAUS]

I don't know that there are any government regulations that determine medical plan eligibility for part-time employees. If the employer is large enough, or self-insured the employer can determine who is covered. Usually eligibility is determined on the bases of how many hours the part-time employees is scheduled to work during a normal work week, i.e. 20,30, etc...

If you have an insurance company telling you who you can have as eligible employees, then they can limit part-time employees on the basis of hours worked based on their underwriting standards. That's why I say if you are large enough, or self-insured you can eligibility on your terms.

I'm not sure what you are asking with regard to participation rates. If the only issue is coverage for part-time employees, if you offer it on an equitable basis there shouldn't be any participation problems. If you are asking in regard to pre-tax premiums via a Section 125 plan, what you need to be concerned with is not having the plan be descriminatory in favor of highly compensated employees.

[Guest samrhett]

In the last message you refered to premiums not being discriminatory toward higher paid employees. Can you explain. I just found out that some managers at my company have been getting their dependant insurance free. It has been costing me $170.00 a month for 10 months. It is now going up to $244.00 a month. I am a manager, too. However, no one further down the ladder gets theirs paid. Is this what you meant. This is a self-insured plan.

Also, everyone was hired under the promise of company paid health and dental for the employee. They are now charging us. Is it ok for them to change the terms of the verbal employment contract?

Thanks for your help

[Guest taylorjeff]

Normally, a self-funded plan should run a Sec. 105 discrimination test. If the managers are considered Highly compensated employees (officers, shareholders, top 25% in pay), some or all of the benefits paid to them may be considered excess reimbursements and qualify as taxable income. In most cases, plans will pass muster under section 105 as long as the employer does not carve-out certain benefits that are only available to the HCEs.

Regarding the promise of company paid benefits, most employers will make an offer at employment. They are not bound to that offer for perpetuity, and can make changes over time. If you have a written guarantee for a period of time, then you have something to talk about.

[Guest Lisa Nieman]

Each company will define how many hours an employee needs to work in order to qualify for benefits. I am not aware of any law that would make a company offer benefits to part-time employees. I have seen where an employer imposes higher health premiums on part-time employees. Doesn't seem fair to me but they get away with it.