Cutting dependent health coverage

GAEmployer

[font size="1" color="#FF0000"]LAST EDITED ON 01-21-03 AT 08:22AM (CST)[/font][p]We are a small company (less than 20 full-time employees) that currently pays for dependent coverage under our health care plan. We are needing to make some budget cuts and are considering cutting health coverage for dependents. Employees could still obtain dependent coverage by paying for it at the group rates. We hope to be able to make this change with the scheduled anniversary date of the plan in March. Are there any pitfalls or legal implications that we need to be aware of? Any notice requirement? Thanks.

bsa

As group rates continue to increase, a number of employers will face the same situation you are currently experiencing. I would give my employees as much notice as possible that a change is coming in March, even if you can't be specific about actual cost impact.

My company's past practice has been to pay 85% toward EE coverage and -0- toward dependents. With the last 2 increases, the company elected [u]not[/u] to pass the increase along to the employees, so in effect the company is paying a small portion of dependent coverage at this time. I expect that to swing back to the 85/0 practice at our renewal this year.