Free insurance for upper management.

[TOM MAYNARD]

Is it legal to provide free health insurance to select members of upper management while the rest of employees pay a substantial
portion of their premiums?

If this is improper and the employer stops the practice,is it legal to give the select employees a raise to cover their portion of the premium?

 

[cbg]

It is almost certainly legal.

An employer may create "classes" of employees and have differing benefit plans for different classes. Some commonly used classes would be, full or part time, exempt or non-exempt, managers or non-management staff.

The only thing that would not be legal would be if, having created the classes, the employer picked and chose among the members of the class as to who did or did not get the benefit package. Once the classes are defined, all members should be offered the same package as all the other members of the same class.

Therefore, as long as all members of the class as defined were given the free benefits, it's legal.

If for some reason the company decided to stop the practice, it would be neither required nor forbidden for them to offer pay raises to off-set the costs, as long as they were consistant within the class.

 

[Beth3]

Yes, it is perfectly legal for an employer to offer different benefits to different "classes" of employees. (Class as in executive, managerial, administrative, and production; or exempt and non-exempt; or office and shop, and so forth.)

You have to provide the same benefits to everyone in the whatever classes the employer defines however, as it applies to benefits (such as group health and retirement plans) that are subject to ERISA regulations.

So it is legal for the employer to pay the full boat on premiums for upper management and not any other employees. Whether that's a good idea or not is a whole 'nother discussion.

If this employer stops the practice, yes, it would be legal to give those employees a pay raise to cover their premium costs.

 

[Beth3]

cbg, we're posting at the same time again.