Health Benefits Company Contribution

[islandlites]

What is the name of your state?What is the name of your state? New York

My 5th year anniversary with my company will occur in November 2005. Effective 90 days from date of hire, my health insurance (family coverage) commenced and has remained uninterrupted. I was advised at that time that the company's contribution to my cost would be X and I was responsible for the remaining Y. As policies changed, the company continued to contribute the same X and my Y contribution increased as the policy cost increased. This was understood and agreed to (verbally). In the recent past (6-8 months ago) a newly appointed CFO advised me privately that he found company contribution practices violated NY law in that not all employees were receiving the same company contribution of X, some are receiving less. Apparently, those on family plans received a greater company contribution than an employee on a single plan - a practice that has ensued since long prior to my date of hire - and totally unbeknownst to me personally. His promise to me then was that my salary would increase (I have not had a raise since 2003 - the only one received since date of hire) in direct relation to the new Y amount required to maintain my policy. Insurance contribution is pretax - made sense to me to accept this. While my payroll has yet to reflect this change, the insurance renewal date is this week. I was advised by the payroll clerk that the CFO needed to talk to me about my health insurance contribution - it appears that now they may just reduce the company contribution and leave me to hang for the huge increase in Y. If that as the case, I view this as a $5000 cut in my employment compensation package - cooincident with my assumption of additional responsibilities in the company. Certainly not fair - but is it legal?

 

[Beth3]

I'm no expert on NY labor laws but I have a lot of years working with employer sponsored group health plans in several different States and I find it incredibly unlikely that NY State has mandated that all employees receive the same contribution towards their health insurance premiums, regardless of the level of converage they select. It is close to a universal practice that employees who take a family plan receive a higher dollar contribution than employees who take a single plan. If that weren't the case, the vast majority of employees couldn't afford family coverage or would be jumping ship to another employer who pays a larger portion of the premium. The rate of turnover would be tremendous.

Even if the employer provides the same % of premium contribution for all employees (say 75%), the dollar value is going to be considerably different for those employees who take a single plan vs. those that take a family plan. Family plans can easily cost 4 - 5 times as much as single coverage.

I can't help but think that either you misunderstood the CFO or he is badly mistaken. (If someone knows something about NY reg's on this and I'm wrong here, please comment.)

Getting to your question, yes, your employer can change the level of funding they provide towards your health insurance, pretty much any time they like. The only legal requirement (at the federal level) is that all "classes" of employees be treated the same and an employer may define "class" in any non-discriminatory but consistent method they wish.