Different health insurance subsidies

Previous | Next
 rated by 0 users
Latest post Sun, Apr 23 2017 2:32 PM by cbg. 12 replies.
  • Fri, Apr 21 2017 12:52 PM

    • NY employer
      Consumer
    • Not Ranked
    • Joined on Fri, Apr 21 2017
    • NY
    • Posts 5

    Different health insurance subsidies

    Can a small NY (household) employer (with 2 FT employees) offer an employer-sponsored health insurance plan for one FT employee but not another?  The one who we'd like to cover has been with us for over 2 years.  The one we'd just as soon not cover will hit the 90 day employment mark imminently, but has insurance coverage through a spousal plan anyway.

    We'd be willing to pay 100% of the premium for employee 1, but don't see any reason to pay for insurance for employee 2, who doesn't need it anyway and who has only been with us for a short time.

    The insurance broker is telling us that if we offer insurance to one FT employee, we must offer it to all, but that we can set up different percentages of employer contribution toward the premium (e.g., 100% to anyone with us over 2 years, 50% for 1-2 years, 25% over 6 months, and 0 up to 6 months).  Is that accurate?

  • Fri, Apr 21 2017 2:34 PM In reply to

    Re: Different health insurance subsidies

    NY employer:
    The insurance broker is telling us that if we offer insurance to one FT employee, we must offer it to all, but that we can set up different percentages of employer contribution toward the premium (e.g., 100% to anyone with us over 2 years, 50% for 1-2 years, 25% over 6 months, and 0 up to 6 months).  Is that accurate?

    As far as I can remember from my insurance agent days, that's true.

    And I think you also have to have it on all employees to write it off as a business expense. You can check your tax guy on that. I'm not sure if that's still the case.

    But what I also remember is that there really isn't any cost savings for group insurance for a small business. The rates and coverages are pretty much the equivalent of buying individual policies.

    So if you want to only pay for Employee #1 and don't want to pay for Employee #2, have #1 go buy himself an individual health policy and give him a raise to cover it. Nothing wrong with paying one employee more than the other based on that employee's "value" to the company (which is anything you say it is) and you still get the tax deduction for his pay.

    Yeah, he pays taxes on the income but instead of paying $1000 per month for his medical insurance, maybe he pays $200 per month toward the tax on his additional earnings. Not too hard to take. People would kill to pay only $200 per month for medical insurance.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Apr 21 2017 2:47 PM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,417

    Re: Different health insurance subsidies

    Been a while  but some  small employers I know use such staggered eligibility    And some just flat out limit some workers to 29 hours a week. But the rules keep changing and I may be 1 step behind. 



  • Fri, Apr 21 2017 3:03 PM In reply to

    Re: Different health insurance subsidies

    It was always permissable to divide employees into different classifications to favor one class with medical insurance.

    But it would be a hard sell with only two employees.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Fri, Apr 21 2017 3:13 PM In reply to

    • NY employer
      Consumer
    • Not Ranked
    • Joined on Fri, Apr 21 2017
    • NY
    • Posts 5

    Re: Different health insurance subsidies

    This is a home health care situation, so it is not a profit making business with any expenses that can be deducted.

    I wish employee 1 had bought an individual policy.  I could have arranged for a qualified small business health reimbursement account and paid her.  But she let her insurance lapse and it is not open season now, so her only option for insurance right now is an employer-sponsored plan. 

    So the question is whether we can pay her premium while not paying the premium for employee #2 who has a 36 hour/week work schedule (that we aren't looking to cut back) and who has spousal coverage anyway.

     

  • Fri, Apr 21 2017 4:43 PM In reply to

    • cbg
      Consumer
    • Top 25 Contributor
    • Joined on Thu, Dec 21 2000
    • MA
    • Posts 7,062

    Re: Different health insurance subsidies

    NYemployer - what is the likelihood that you will eventually increase your number of employees?

  • Sat, Apr 22 2017 5:44 PM In reply to

    • NY employer
      Consumer
    • Not Ranked
    • Joined on Fri, Apr 21 2017
    • NY
    • Posts 5

    Re: Different health insurance subsidies

    Right now we have 2 FT employees and 2 PT employees.  Eventually, I can envision having 3 FT employees instead of the PT people.  We just need enough staffing for 24/7 care for one senior citizen at home. 

  • Sun, Apr 23 2017 3:56 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on Thu, Mar 30 2000
    • PA
    • Posts 51,417

    Re: Different health insurance subsidies

    Been there with 24/7 care issues .   I would give some serious thought to keeping much of staff as PT , just below 30 hrs a week. 



  • Sun, Apr 23 2017 5:41 AM In reply to

    • cbg
      Consumer
    • Top 25 Contributor
    • Joined on Thu, Dec 21 2000
    • MA
    • Posts 7,062

    Re: Different health insurance subsidies

    The reason I ask is that for qualifying employers there are very definite laws about the classification of employees for insurance purposes. You are much too small to fall under that requirement. However, if there is even the remotest chance that you might at some point have grown to where you do qualify, it would be well to set up your policy to be in compliance with the law.

    That would mean offering the insurance to all full time employees (with full time being defined as one who works 30 hours a week, or 130 hours in a month). I don't see any problem with paying a different amount based on length of service as long as the minimum amount you pay is at least the minimum amount required by law.

    And of course, offering the insurance doesn't mean taking the insurance. If you offer it to an employee who already has insurance and they turn it down, there's no problem with that. The issue comes in when the employee who is covered on their spouse's insurance loses that insurance due to a job loss or job change, and wants to be added to yours.

  • Sun, Apr 23 2017 5:58 AM In reply to

    • NY employer
      Consumer
    • Not Ranked
    • Joined on Fri, Apr 21 2017
    • NY
    • Posts 5

    Re: Different health insurance subsidies

    Under current law, we will never be a qualifying employer for ACA purposes (i.e. no way we'll ever be at 50 employees).  And I am using the 30 hour mark now to distinguish FT and PT. 

    What I'd really like to do is pay 100% of the insurance of FT employee 1 who needs it and has been with us for ages and pay 0% for the insurance of  FT employee 2 who has been with us just a few months and has spousal coverage.  When you say "as long as the minimum amount you pay is at least the minimum amount required by law" that's where I have the question.  Once we, even as a non-covered employer, offer to pay for insurance for one FT person, what obligation is there to offer the same payment for the other FT person.  Even if employee 2 is on her spouse's (NYC) policy, she might be entitled to a waiver payment from the spouse's employer if she takes our coverage.  But based on her length of tenure with us, I would rather not end up paying for her insurance. 

  • Sun, Apr 23 2017 10:34 AM In reply to

    • cbg
      Consumer
    • Top 25 Contributor
    • Joined on Thu, Dec 21 2000
    • MA
    • Posts 7,062

    Re: Different health insurance subsidies

    As long as she has her insurance through her husband, you are not obligated to pay any of her health insurance, Not even if you're paying 100% of the other employee's.

    The issue is, as I said, what you are willing to do if she should lose her husband's insurance.

  • Sun, Apr 23 2017 11:00 AM In reply to

    • NY employer
      Consumer
    • Not Ranked
    • Joined on Fri, Apr 21 2017
    • NY
    • Posts 5

    Re: Different health insurance subsidies

    Is there some law or rule that governs this that I coudl read up on?  Broker is telling me I need to give notice to all FT employees that insurance is available.  And it looks as if I'm supposed to fill out and distribute a FLSA fact sheet if I start offering insurance to anyone, so I want to be sure that whatever I announce as "policy" will stand up to scrutiny.  (See sample notice at this link:  https://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf)

  • Sun, Apr 23 2017 2:32 PM In reply to

    • cbg
      Consumer
    • Top 25 Contributor
    • Joined on Thu, Dec 21 2000
    • MA
    • Posts 7,062

    Re: Different health insurance subsidies

    That's the problem - this is a huge issue with lots of moving parts. Many if not most of them don't apply to you, but there are things to think about that might not occur to you until you run into them. Your best bet is to work with your insurance broker. For what it's worth, I don't see anything wrong with what he's telling you, but you're going to need to make some decisions about what you're prepared to do or not do if the status quo changes.

Page 1 of 1 (13 items) | RSS

My Community

Community Membership New Users: Search Community