NYS law regarding offering health benefits to employees

[Guest iris]

Can a company of less than 10 employees offer medical and dental benefits to only selected employees of the same job category? (new york state)

[Joe Priselac]

Iris,

There is no state law mandating the offer of health or dental insurance. I assume you are referring to a fully insured plan given your size. Since IRC section 89 was repealed there are no Federal nondiscrimination rules governing health and dental plans. The short answer is that you can offer medical and dental on a "discriminatory" basis. Typically I have seen the company contribution vary, but I was involved with a medical group where the doctors purchased dental coverage on themselves and not the rank and file employees. The biggest hurdle you will face is the insurance company underwriting guidelines.

[Guest iris]

Joe,

So, what you are saying is that the owners CAN offer the medical and dental plan to whoever they see fit, considering we all have the same job description. Some people are offered the plan and others are not. According to what you are saying, there are no laws that say otherwise?

[KIP KRAUS]

Iris:

Who is the insurer, and is the medical plan individually underwritten based on a health questionnaire, or is it a true group plan with no medical underwriting?

[Guest iris]

It is definately supposed to be a group plan. It's with Oxford. The dental plan is what is getting to me. It's with First Fortis and is also a group plan. I know they put somebody on who needed dental work and she was denied because she is on a 12 month waiting period because "she didn't accept it when it was offered to her". Only it wasn't offered to her until she was there more than 2 years. Now the same thing will happen to me IF they offer it to me. I just want to know if I should ask to be on it. If you don't ask in my office then you don't receive.

[KIP KRAUS]

iris:

You work for an interesting company to say the least. I may be mistaking, but in order to have a true group plan in NY I think you need at least 5 participants. I also believe that any group insurance plan sited in NY must preclude individual selection, which means that it must be offered to each eligible employee based on some eligibility provision that precludes individual selection.

I would contact the insurer and get the eligibility provisions from them, or the Department of Labor.

As to the 12-month waiting period for late enrollees in a dental plan they typically only require a wait for major work and only cover preventive work during the first 12 months.

[Guest iris]

Kip,

You are right, I'm sure, on all counts. They are both group plans with group numbers. The owners got the plan so that they're married daughter could be covered with her husband and their kids. And since then it has seemed that if they decide to allow it, they will put certain people on. (same job category) I think that you're right - if they are paying for one full time person they should put all full-timers on.

As for the dental plan - yes, you are right if you are enrolling late you have to wait 12 months for major work. However, she was never asked to be on the policy until she said she needed work done. The Insurance company, however, ASSUMED she was offered the plan when she was hired, leading me to believe that she should have been.

[KIP KRAUS]

Sounds more like crowd insurance to me unless the owner’s daughter is an employee. Don’t know what you are going to do unless you want to contact the state insurance commission and see what they say.

Doesn’t sound like an employer I’d want to work for.

[Guest iris]

The owner's daughter is "by a technicality" an employee. The owners make a small check out in her name every week so her and her family can be covered. Doesn't seem fair to those who actually work there. Anyway, I appreciate all of your input. You have been a big help. I'm sure I'm going to have to look elsewhere - single and benes are very important to me.

Thanks again!

[Guest Mike Morris]

I hope the owner's daughter doesn't have a major claim and the group plan doesn't get 'reunderwritten' for compliance with the master application's eligibility requirements. I have seen this happen when the insurance company requested detailed payroll records to prove that only bonafide eligible employees were covered.

In this case, large claim was denied.