Equal Premium Payment for Employees
Q: I have a question about what I am paying for my insurance through my company where I work. Is it fair that I have to pay $84 a month for my part of the insurance and not all other employees. I have money taken out of my check for my part of the health insurance, but I know some of the employees don’t have to pay anything out of their check. Is it legal for my company to play favoritism like this?
A: There may be several reasons why you have a payroll deduction for your health insurance, while other employees do not. Your employer should be able to explain this to you. The insurance premium that your employer is paying to the insurance company may not be the same for every employee. Group health insurance premiums are often based on the age of each employee. The amount that your employer pays for a person that is age 45 will, in most cases, be greater than what they have to pay for an employee that is age 30. It is possible that your employer has set up equal contribution for each employee. For example, let’s say that amount your employer has to pay for your insurance is $200 per month, but he is only paying $120 for a younger employee. Now, let’s say that your employer has agreed to contribute an equal maximum amount of $150 to each employee’s insuance premium. This may be acceptable if this amount meets minimum employer contribution guidelines as outlined by your state’s insurance regulations. Since your insurance is $200 per month, that will leave you a balance of $50, that will be deducted from your paycheck. The younger employee will pay nothing because their insurance premium is less. This is only one possible explanation; your employer should be able to give you the exact reason.
No, this isn’t why. I asked my employer about it before and he said they paid 100% of each employee based on lowest plan. I don’t know what that means.
Comment by Randall — December 21, 2006 @ 10:05 am
Ok, this makes sense. You have probably chosen to enroll in a health plan that is more comprehensive and more expensive than the lowest plan option available to your group. Ask your employer what plan you would need to switch to in order to have them pay 100% of your premium. You will probably lose benefits, but those may be acceptable to you, in place of the monthly payroll deduction.
Comment by admin — December 21, 2006 @ 10:06 am