should EE med rate vary by salary?
Caroliso
352 Posts
I found myself in a conversation about increasing health plan rates that get passed onto EEs and dwindling salary increases year to year. Someone posed an idea I'd never heard before, wonder if you all have.
The proposal was to graduate EE health plan contribution rates according to salary, so that those with lower salaries paid the lowest EE contributions and those with higher salaries paid the most.
I can think of HR reasons why I wouldn't want to do such a thing (e.g. how fair is it to assume that someone who is higher paid should or could absorb more than their fair share of costs?), but I wondered a) would this be legal and b) if yes, has anyone heard of a system like this being implemented?
Maybe it's no different than unionized EEs in a company negotiating a particular salary increase, health plan contribution or other benefit that doesn't apply to non-unionized workers, but not having been in that environment I'm not sure how that differential is managed.
Thoughts?
The proposal was to graduate EE health plan contribution rates according to salary, so that those with lower salaries paid the lowest EE contributions and those with higher salaries paid the most.
I can think of HR reasons why I wouldn't want to do such a thing (e.g. how fair is it to assume that someone who is higher paid should or could absorb more than their fair share of costs?), but I wondered a) would this be legal and b) if yes, has anyone heard of a system like this being implemented?
Maybe it's no different than unionized EEs in a company negotiating a particular salary increase, health plan contribution or other benefit that doesn't apply to non-unionized workers, but not having been in that environment I'm not sure how that differential is managed.
Thoughts?
Comments
Coverage and deductibles are the same; it is only the premium that is changed. Of course, either amount is not very much for employee only coverage, so I doubt if the difference is enough to make anyone sit up and scream. (They pay nothing on dependent coverage.)
Nae
I wish we could fully cover dependents, it must be a powerful recruitment tool.....
By the way, Caroliso, back in Aug & Sep I had asked a couple questions about your original posting in Apr, “My Pet is a Service Animal”. I am still interested in learning if/how this was resolved.
Up to $30,000 150/300
30,001 - 60,000 200/400
60,001 - 150,000 300/600
150,000 + 400/800
We self insure. The logic used is that higher income employees can afford higher deductibles if they use their insurance. Otherwise, everyone pays the same in insurance premiums. I have mixed emotions about the practice.
This is just another way for one group to subsidize another. Group plans already have the healthy folks subsidizing those that have higher profile health conditions. When you think about it, having the higher paids subsidize the lower paids is sort of undoing the healthy subsidizing the less healthy.
One of the assumptions is that higher paids can be there just due to seniority; and seniority means older; and older means a higher liklihood of health problems.
Normal group plans have this dynamic built in - higher health cost members are subsidized by lower health cost members. Now lets reverse that by having higher paid members subsidize lower paid members.
Seems complicated.
I used the example of a lower paid ee and a higher paid ee going to buy a dress at Wal-Mart -- why should the higher paid ee have to pay more for the exact same dress? Just doesn't make sense to me!
You do raise an interesting point about subsidizing of sick vs. well and high earners vs. lower earners.
It is real easy for folks to make decisions that affect their lives and then ask others to support those decisions. People who made sacrifices to get a better education (and therefore a higher paying job), or who have taken risks and then reaped rewards, should not have to subsidize those folks that went another direction.
I don't even care if the person with the money is blowing pockets full of money on chocolate or boats or just flying around the world. It's their money and time and in America, it means they have the freedom to do what they want with the money (after tax of course). Just don't force them to take care of those with less. If they want to do those things - fine, it's still their money.