Medical Coverage Premium Reimbursement in NC
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My client is in NC and does not offer a health insurance program to their employees. They provide a $100 premium reimbursement to those that are covered elsewhere. On the employee’s paycheck, there is a line item that states “Premium Reimbursement”. The $100 is subject to taxes.
Can the employer do this? I
Thanks in advance for any help you might be able to offer.
Best wishes,
Shannon Jones,
Comments
<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
My client is in NC and does not offer a health insurance program to their employees. They provide a $100 premium reimbursement to those that are covered elsewhere. On the employee’s paycheck, there is a line item that states “Premium Reimbursement”. The $100 is subject to taxes.
Can the employer do this? I
Thanks in advance for any help you might be able to offer.
Best wishes,
Shannon Jones,[/quote]
They can pay for any reason and by any mechanism that doesn't violate any law. Paying employees to get their insurance elsewhere is perfectly legal as far as I'm aware. You can bet they have substantially reduced their costs doing this.
Of course, the Company could be concerned that it could actually be paying someone not to be insured. The system can be gamed. You can get on your spouse's insurance, show your card, drop coverage, and net the $100 gross pay for a whopping $1,200 per year. That would be a really foolish thing to do and, if discovered, I'm sure the Company would get indignant and perhaps even fire someone but it would still be cheaper than insuring you so the Company feels like it has won, despite the fact that you brought the flu to work because you didn't get your shot because it cost $5,000 to get without coverage. Of course, I got my shot and got sick anyway but that's how it goes sometimes.
One could argue that this discriminates against single people but I doubt any court would want to spend a lot of time on this.
The bottom line is that the model of forcing the public to rely on employers as the primary source of insurance is going to result in strange things like this, particularly during tough economic times, and particularly while health care costs are going through the roof (as they have been for a few decades as if nobody has noticed).