Health Benefits for All

[JennJenn1981]

STATE: Illinois

Hello,

I am new to the H.R. field and had a question regarding benefit availability. The company I work for employees "corporate" employees (full-time hourly, and salaried (exempt)) as well as sales representatives in different stats throughout the U.S.

I was reading through one of our offer letter attachments that goes out to our sales representatives, and noticed that these people must meet a performance requirement in their first 90 days of employment in order for us to offer them benefits (according to our contract). Contract reads: To enroll in the company benefits program on the 91st day of employment, you must complete 20 new standard $25-program agreements in the first 90 days."

It didn't make sense to me that our corporate employees (as long as they are full time) are eligible for benefits simply because they are here for 90 days.

I was reading an employment law book that says, "If health insurance is available through an employer, all employees must be offered the same coverage, or the same options for coverage, under the same conditions."

I interpret this to mean that we can't have a performance requirements for one group if we don't have them for other groups. Can anyone tell me if I'm on the right path here? Would anyone know what law or statute I could reference to find out if I'm correct?

Thanks very much!

Jenn L.

 

[cbg]

You're on the right track, but I'm not certain you're at the right intersection. (I'm not certain you're at the wrong one either - let me explain.)

The statement you have quoted is just a hair too simplistic. Taking it literally, if insurance benefits are offered at all, then ALL employees, without exception, must be offered them. That's not true. An employer may carve out "classes" of employees and offer insurance only to certain classes. For example, insurance can be offered only to full time employees but not part time; only to office employees but not to field staff; to non-union but not to union (remember, union employees will have their own benefits); to exempts but not non-exempts; and so on. Once the eligible classes have been established, everyone in the class must be offered the same benefits or the options for the same benefits.

In your case, one class has an additional eligibility requirement. I can see this going either way, and I think you're going to need to get a definite opinion from the US DOL. On the one hand, EVERY member of that particular class is being asked to meet the same eligibility requirements as any other member of that class. On the other hand, other classes do not have to meet that requirement.

If the plan document says only that employees are eligible after 90 days, then the extra requirement for sales representatives will have to be dropped. That is for certain. No ifs, ands or buts.

But if the plan document also includes the extra eligibility requirement, it MIGHT pass muster since all members of the same class are having to meet the same requirements.

The applicable law is ERISA, but please don't ask me to point you to a particular page or section. ERISA is an enormously long and complicated law, and I simply can't do it. I'm sure, however, that the DOL can.

I'm about 85% certain that you are correct, but ERISA has surprised me before, so I'm holding out the possibility. Check your plan document, and if you find mention of the extra requirement there, check with the DOL. If you don't, you'll need to show that page in the law book to your higher-ups.