policy for cash in lieu of health insurance

nivzix · July 2004

Does anyone have a policy they can share for employees opting out of the company's health insurance and receiving cash in lieu of insurance?

Thanks!

smaces_twin · July 2004

I don't have a policy and personally think it is a miguided approach to cost savings. It is very short-sighted. The person getting cash will get very limited, if any, preventative health care and will slowly get high cholesterol, HBP, diabetes, back problems etc and eventually they will blow up and cost somebody (in reality all of us) a ton of money. Do the right thing and encourage your ee's to be healthy. Don't encourage them to buy a car with their "new" money then end up in the hospital in X years bankrupt and near death.

BTW I realize I'm being a bit dramatic. But I do have a strong opinion regarding this.

Molly04 · July 2004

We do offer a waiver for our employees who have health insurance thruough another source..usually a spouse. We pay 1/2 of what it would cost to cover them. They must show proof of insurance. We don't allow them to just choose to go without in order to get the cash.

marc · July 2004

We used to do something similar. We gave each EE a pool of cash to use for various benefits and then required proof of a major health insurance policy. Any unused cash found it's way into the EEs paycheck. Many of our EEs utilized coverage through spouses or some of those very inexpensive major medical policies.

At the same time, we offered group health for the EEs. About 1/3 of our EEs took advantage of the company's group health policy and everything was fine until the company's group premiums (paid for by the EEs with their individual pool of cash) began going through the roof. The way the program worked, the healthy people got inexpensive policies that just took their own individual issues into consideration and having few issues, their premiums were inexpensive. Those that had medical problems were in the company's group plan and because the claims experience was not good - obviously premiums went up, and at a much faster rate than the rest of the country was experiencing. Finally the rates were getting so high that people who needed insurance could not get it.

We finally discontinued the pool of cash approach and adopted a group health plan that required every employee to participate, 100% paid by the company. Premiums went way down because now the group was larger and included the healthier EEs also so the claims experience was measured over the larger group and a larger premium base, etc.

This is just to illustrate what other posters have said will be the eventual result - people with serious conditions will end up with no insurance and regardless of the societal costs, the costs to your business for good, trained EEs being out on leave for medical purposes will be very large indeed.

policy for cash in lieu of health insurance

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