Inconsistency in Employer Health Plan

[wingsfan]

What is the name of your state (only U.S. law)? Michigan

I currently have Blue Cross Blue Shield through an employer-sponsored insurance plan (the employer pays premiums to BC/BS, they are not self-insured).

Effective March 1, 2009, the employer increased the rates for how much employees have to contribute.

Prior to March 1, 2009, employees contributed based on the standard coverage tier (single, two person, family).

Also, the employer prior to March 1, 2009 had an insurance opt-out option where employees would get a lump sum amount if they choose not to participate in the employer-sponsored insurance. The lump sum amount was the same amount regardless of what coverage tier you would have fallen into (single, two person, family).

Effective March 1, 2009 the employer is now charging a flat amount for all employees regardless of your coverage tier (in other words, it doesn't matter if you have single coverage or family coverage, you contribute the same monthly amount).

As with the opt-out option, starting March 1, 2009, if you opt out you would be paid a lump sum based on 15% of the yearly premium within the coverage tier that you would have fallen into. Meaning, if you opted out, someone with single coverage would receive an amount less than someone that would have fallen into the family coverage.

So my questions are:

1. Based on Michigan law, can an employer charge employees the same amount to contribute for health insurance premiums regardless of what coverage tier they fall into?

2. If an employer can charge employees the same amount regardless of what coverage tier they fall into, is it legally problematic that they are at the same time differentiating between coverage tier when offering an opt out lump sum payment?

Thanks in advance.

Mike

[cbg]

1. Yes

2. No

It's not the way I would do it, but it's not illegal either.

[wingsfan]

Originally Posted by cbg

1. Yes

2. No

It's not the way I would do it, but it's not illegal either.

I had a feeling that was the answer but wanted to make sure this at least didn't fall outside of being legal. And as you state, it's probably not the best approach for an employer to take.

Thanks cbg.