Is this discrimination?

shargold · March 2004

We are considering charging employees a greater premium deduction for additional children on our group health plan coverage. Would this be in violation of ERISA's discrimination regs? Could it be considered disparate impact on certain nationalities or religions?

Thanks for your thoughts.

Nat · March 2004

[font size="1" color="#FF0000"]LAST EDITED ON 03-04-04 AT 12:57PM (CST)[/font][br][br]I think there are plans out there that designate different premiums for different numbers of children (i.e. employee+1 child = some number
employee+2 children = some number)
We used that method when I worked with a self funded plan some years ago. Of course, the laws may have changed now but to answer your question, I don't think it is discrmination. Employees might like it better because in many cases if they have more than one child then the only other alternative is family coverage which usually increases the premium substantially. It might really help your employees have have 2+ children and no spouse.

JM in ATL · March 2004

I just want to make sure I understand this...

Right now you have an employee and children rate of say ($500) per month. Let's say you only ask ee's to pay 50% of the premium cost. So now an ee who has employee+children coverage pay $250 per month for coverage.

What you WANT to do is have employees who only have one child under that coverage election to pay $250, but an employee who has 4 kids under the employee and children election will pay $375 per month? Is that correct?

Or are you going back to your insurance company and asking them to create new rates for employee and +1kid, +2kids, +3kids, +4or more kids?

If you are thinking of option one, I can see an employee claiming discrimination based on family status. As far as religion or national origin, I don't see discrimination b/c your religion or national origin doesn't always necessarily mean you will have lots of kids. I work with a catholic who has 5 kids. I too am catholic and have none. It really isn't something consistent which can be considered discriminatory. Know what I mean??

Anyway, can you clarify what you mean, please.

shargold · March 2004

We have a self-funded plan and currently charge the same rate for 1 child or 10 children. We are considering rate increases on a per child basis. For example, we would charge one rate for an employee with 1 to 3 children, but if they have 4 or more children, we would charge a greater rate.

lnelson · March 2004

I don't see a problem with this but I would give your ee's at least 90 days notice before implimenting the change in case they opt for other options.

Carey · March 2004

Your proposal doesn't sound unfair or discriminatory to me. I would not be happy (but wouldn't cry discrimination) if my employer did that because I have four children; those with fewer kids would probably like it.

sonny · March 2004

We pay 100% for the employee.
Dependent options: Spouse only
Employee & Child(ren)
Family

All are different copays for the employee. Also, the less you make, the larger portion the employer picks up.

Is this discrimination?

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