Waved Health Insurance Use as Income
alechatfield
1 Post
What if an employee does not want the health insurance package that we offer and instead wants the money that we would put in for him as his salary? So if we offer him/her $50k and we would pay $4k in health insurance costs a year for this employee but since he/she is not getting health insurance they want their salary to be $54k a year.
I think it should be a yes on health care of you waive it, no I want the money for it. It comes to be a HR nightmare b/c what if later on they want the health insurance do you lower the salary?
Do any of you do health insurance allowences as salary?
Thanks
A
Comments
I know some companies that do this as an irrevokable decision. That is if the employee wants the insurance later, they must pay the cost. They do not decrease the salary...instead they increase the deduction. This is all communicated up front with the employee acknowledging the waiver.
Some companies give a percentage of the cost back, but only if the employee proves they are covered under another plan. And many plans are now doing "spousal carveouts" -- that is if your spouse has insurance available through their employer, they are not eligible under your plan.
We do not pay people to waive our insurance. Many times the healthiest of your population will do so which increases your risk and your premiums.
Employee benefits will never be a fair system, so I refuse to even try to manipulate it to be so. A family of 3 pays the same as a family of 17...is that fair? I look at it this way...my employer gives free sodas...I don't drink them...should I get the 50 cents a day they don't have to spend on me because everyone else at work drinks a soda a day?
My company does just that. They offer the insurance as a package deal and each candidate chooses to take the package or not. If they choose the insurance package then they make $X, if they choose to opt out of the insurance package then they make $X+4000/annually. If the employee opts in for the insurance package at a later date (during open enrollment) then their pay is reduced AND they contribute to the plan to help offset the cost. I do not agree with this system but it was in place prior to my coming on board and I have done what I know to do to change things. Thankfully we are a small company and it is easy to keep up with.
I have taken steps to separate each of the benefits so that employees can pick and choose what they think they need or want to pay for. I am pushing for a standard salary range regardless of the need for benefits. We'll see.
I hope this helps.
My company is in Illinois and we offer Medical Insurance where the employee is responsible for 20% of the premiums which we deduct (Section 125) from their paychecks. If an employee waives coverage & is covered on another policy elsewhere (not including Medicaid or Medicare) they are paid an Opt Out on their check as a separate line item (titled Ins Opt Out). We pay them the amount we would otherwise be paying the insurance company if they were covered as an Individual. It is taxed & paid out on the 1st paycheck of every month. We adjust it as our premium amounts change.
We have a small group & only 7 Opt Out's so it's not too bad, but very unusual as I've only heard of 1 other employer doing this and they are a very large corporation. The employee's seem really appreciate this "program"!
Mouse in Illinois