Seeking Dependent Coverage Opt Out Policy ideas

[Guest Casey Warner]

I'm looking for information on "Opt Out" benefits offered for Dependents coverage. We are a small company (< 20 employees) and we are considering offering a monetary pay out for those who opt out of our group Medical insurance plan. Anyone with an opt out plan willing to share their policy? We're looking for ideas on structure and amount (ie: opt out benefit paid monthly/semi-annually/annually, 25% (??%) of current Co contribution for Dependents

insurance premiums, etc...).

[Guest Paul]

Many employers are adopting opt out plans. Note these are really a form of cafeteria plan (i.e. Section 125 of the IRC). There is no real standard as to what to "pay" those who will opt out. It really is a matter of how it will take and how much you want to spend to "buy" them out. You should only pay the money periodically and at the end of the period because of the special enrollment rights under HIPAA. That is, HIPAA says you have to let them im so you don't want to pay until after the period lapses. So, for example, you wouldn't want to pay them for the whole year upfront because HIPAA may require you to let them into the plan after a month.