Insurance contribution rate...fixed? discrimination? HELP!

[MarcGTO]

What is the name of your state? New York

Our organization is currently setting up employee contribution rates for health insurance. In the past, the company has picked up the tab, but with a growing organization, we simply can't afford to do so anymore.

If anyone can share some insight in the following areas, it would be much appreciated.

1. Is the employer required to set a fixed contribution rate for all exempt employees? Or can it be negotiated (case by case)?
2. Can this rate be changed?
3. Can we set the contribution rate based on tenure? (Our current vacation policy is based on tenure)
4. What could possibly result in discrimination?

 

[Beth3]

You REALLY need to consult with an employment law/benefits attorney or an experienced group health consultant in your State as there are both federal and State-specific benefit laws to comply with but I will provide general answers to your questions:

1. Is the employer required to set a fixed contribution rate for all exempt employees? Or can it be negotiated (case by case)? Employers must treat "classes" of employees the same when it comes to group health benefits. You can determine your classes of employees in any non-discriminatory fashion (i.e. you can't make decisions based on race, gender, religion, etc.) Your "classes" can be exempt vs. non-exempt, plant vs. office, executive vs. everybody else, managerial vs. non-managerial, and so on. What you shouldn't do is determine employee contributions on a case-by-case basis.

2. Can this rate be changed? Yes, provided employees are given advance notice. Additionally if employee premium contributions are deducted from paychecks pre-tax (i.e. it's a 125B Plan), you must comply with those regulations as well.

3. Can we set the contribution rate based on tenure? (Our current vacation policy is based on tenure) Yes, and some companies do so.

4. What could possibly result in discrimination? See my first answer. Case-by-case is never a good idea, may be unlawful in your State, and of course basing decisions on protected characteristics will land you in big trouble.