Different Contributions for Dependents

[Bcompliance2003]

Can an employer cover portions of dependent premiums at different levels?  For example:

 

Employee Only Coverage:  Covered at 100%

Spouse Coverage: Covered at 0%

Child(ren) Coverage: Covered at 50%

[CEB]

Self funded plans can determine the subsidy percentage based on dependent type. If you’re looking for savings, go after your RX plan first. Tons of opportunities there such as removing compound drugs except for kids. Preventing diabetes drugs for only diabetes or other FDA conditions. People are using them for weight loss and costing employers so much $$ for weight loss. Remove any drugs that are basically over the counter medications combined into a brand drug prescription (yes several of those allowed on employer plans). Consider adding speciality drug rebate program like Prudent RX. Join a collective RX group so your RX goes up to bid with 20 other companies rather than just your own. You’re buying at 100,000 lives rather than 2000 for example. Willis Towers Watson and Mercer both have them. Then decide if you want to make an employee pay the full cost of premiums for their spouse. Maybe instead have a spousal surcharge for working spouses that are on your plan but have access to their employer plan. And for child coverage why not do employee plus 1 child, employee plus 2 children, etc instead of one flat premium for all kids. Best of luck 🤞 

[Lynne P]

An employer can set the dependent tiers at different employer contribution amounts.  Since the employer likely has a cafeteria plan in order to make the employee payroll deductions pre-tax for the dependent coverage, you just need to be sure highly compensated employees (414 definition) are not favored.  For example, if the employer contributes towards the spouse coverage for executives (who are highly comp or most of them are) but not for non-highly comp employees, that would be discriminatory.

I would also recommend including at least a small contribution for EE only coverage so that the plan is contributory. That way an employee can legitimately waive coverage if they do not need this employer's plan.  When the employer pays 100%, a waiver should not be allowed.  Ensure that if this employer is subject to the ACA employer mandate, the employee's contribution is "affordable" under the ACA if it does decide to charge to EE only coverage.