Employer Paid Individual Health Insurance
As far as other options, is your employer willing to shop for a group health insurance policy and compare the rates and coverage to his current individual plan? Perhaps by establishing a group health plan, he can obtain better coverage for himself while also insuring you. This would also allow him to use pre-tax dollars to pay for the total insurance premium, thus reducing his payroll tax liabilities. 5 CommentsLeave a comment |
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I am the only employee of a small office and my boss will reimburse me up to a certain $ amount for me to get health insurance. I was just told by Blue Cross that in Oregon, I cannot buy an individual plan if my employer is helping me pay for it. However, all small group policies say 2 or more employees and he already has his own insurance. I hope you can help by letting me know what options I may have.
It sounds like Blue Cross of Oregon assumed that your employer would be sending payment directly to them for your insurance premium. If your employer compensates you a set amount to get your own health insurance, and you make payment directly to Blue Cross, they should not have an issue with this. Some states allow employers to pay for the individual health insurance premiums of employees and make payments directly to the insurance company under what is called a list bill. This allows the employer to make the deduction for the expense using pre-tax dollars. This is probably what they are referring to, since Oregon does not require insurance companies to accept list billing from employers who want to compensate employees who purchase their own health insurance. If your employer offers you a monthly bonus, and pays that bonus directly to you, and then you purchase your own health insurance and pay Blue Cross directly, there should be no issues with that. We suggest re-calling Regence Blue Cross Blue Shield and explaining it to them this way, and see if they have an issue with it. Make sure they understand that you will be responsible for sending them the payment, not your employer. We would guess that the issue is with making your employer responsible for paying the premium directly to them. We could be mistaken on this one, but it sounds more like an issue with how the question was posed to Blue Cross.
I followed up with the Oregon Insurance Division, Part of the Department of Consumer and Business Services and they confirmed what Blue Cross had said. It sounds strange, but apparently it’s true. They told me that a group plan (for my employer and me) or paying for my own with no reimbursement plan in place are my only options. The money cannot be given to me directly for the purpose of health insurance. In other words, it’ll have to be taxable pay, not “reimbursement” money.
Comment by Lisa — January 16, 2007 @ 10:45 am
That’s a new one on us. We actually called Blue Cross about this to confirm, and they conferred with what we suggested, saying that as long as the commitment to pay the premium was with you, and not your employer, they had no issues with that. Apparently, the laws apply to your employer and how he can claim the deduction, and not to restrictions placed on the insurance carrier. Which makes sense because Blue Cross would not typically be made aware of the arrangements you have with your employer on reimbursement, as long as the premium payment was coming directly from you. So, it would appear that the solution would be to have your employer, if willing, to increase your pay for the amount of the health insurance. Unless Oregon has some other strange law prohibiting this, it could probably be shown as a bonus, which would be taxable income.
Aside from that, the only other option would be for your employer to set up a group health plan under a Section 125, which allows him to deduct the insurance premiums from payroll before taxes are calculated.
Comment by admin — January 16, 2007 @ 11:17 am
if you have health insurance and is paying it through your employer how can your employer have AD&D AND LIFE insurance on you w/o you signing for it and tells you well a mistake was made on your insurance papers when they were filed and we just continued to pay it, it’s only $6.60 and i didn’t change it. I asked who willl get this 15.000.00 life and 15000.00 ad&d if i died in a car wreck? The answer was oh it goes to an estate if you don’t have a living will. I said even if i didn’t pay for it nor authorized it. She said let me get back with you on that. Please contact me asap. Thanks
Comment by shari — November 21, 2008 @ 1:50 pm
Is this an IRS law or a health insurance law? I own a small corp. where we have paid for our group health plan thru the company. It has doubled this year, so I want to take out an individual plan & have the corp. pay for it. The 1st ? they ask, is: if this is going to paid by the employer, I am not eligible for an individual policy. This is huge when it comes to taxes!!!! Lyn
Comment by lyn — November 25, 2008 @ 11:47 am
Hello, my husband and I are moving to Reno to set up our business together and we have some questions about small business and group health insurance. We are going to set up a small rental business of cars and motorcycles and we really look forward to working together. Well, it’s not just going to be me and him, but also two workers, so I guess that puts us up at 4, maybe 5 if our son wants to work out, but he is only 15 so I don’t know how that would fit in. We currently had Blue Cross Blue Shield of California from my husbands employer. Now we want to get insurance that covers preexisting conditions. So, can we get small business and group health insurance? Will it cover preexisting conditions?
Comment by Laura — June 22, 2009 @ 12:00 pm