For HR/Benefits types - Health Premium question

I’ve been thrust into the position of HR person at work because I know a little more about certain subjects than anyone else in our small office, but I don’t know the answer to this one. I can’t seem to come up with any way to get an answer on Google, so I turn to the Dope.

Is it legal for a company to pay different percentages of health insurance premiums for different employees, assuming they are on the same group plan? For instance, one manager wants to negotiate that the company pay 100% of her health premium when all other employees have 75% employer paid. I seem to recall it is not, or was not, or won’t be in the future but cannot find the applicable law or code.

I was in your position once – good luck. :slight_smile:

Is your question addressed in the plan documents? If not, does your company have other branches, other benefits managers you could ask? Are you the one who will be making the decision?

I can give one potentially relevant anecdote. My previous employer had a rather generous policy where they paid a greater percentage for lower-wage employees. It was something like 80% for the lowest-wage eligible employees, and decreased to maybe 50% for people earning somewhere in the six figure range.

All that means is that different health insurance contributions weren’t illegal federally or in Rhode Island a few years ago. New laws, your state might be different of course.

Do you have an employment law or ERISA attorney you could consult with? Or professional HR association (SHRM, etc).

Years ago I worked for a company that gave you a credit for your healthcare premiums based on how much coverage you elected - so people who chose family coverage got a bigger credit, but it might have worked out to a smaller percentage of the premiums overall compared to someone with single coverage.

I work in HR/Benefits but not with health plans directly. Let me see if I can find some info that might be helpful.

I almost forgot, this is important: is your health plan self-insured by your company or is it fully insured? Assuming your plan is qualified under ERISA, it cannot discriminate in favor of highly compenstated employees.

Short answer - yes you can. It’s just a form of compensation. Different classes of employees receive different levels of compensation.

Managers might have different coverage than the line doggies.
~VOW

Skammer nailed it. ERISA (and §2716 of the PPACA) say no, except to the following extent:

That is, you can can reduce contributions for people doing the same job for lower pay than other people.

Thanks all - sorry I’m so late getting back - my computer at work blew up bad.

So if I understand the ERISA quote, it can be reduced for an employee who is making lower pay than others doing the same work. The matter I am dealing with concerns a contract agreement for a top executive. I will send this quote to our the attorney on our Board and get her ruling. This was part of a contract the Board agreed to , but she is not an employment attorney. At any rate, this gives me what I need (more than a vague memory) to bring up the question.

Thanks RNATB and Skammer

Oh, and Auntie Pam, I am trying to get my hands on the plan documents. Waiting on a reply from our insurance broker.