Health Insurance Policies

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• Health Insurance Policies

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Health Insurance Policies
When an employer offers health insurance to
employees and offers to pay a certain percentage,
can the employer choose to pay different
percentages for different employees or does the
percentages have to be the same for all
employees?
An employer can legally offer different benefits
to employees with different jobs, as long as that
does not result in de facto discrimination. 
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It is very common for an employer to pay one
percentage of health insurance costs for hourly
employees, and a different percentage for exempt
employees. A decade or so ago, it was common
for employers to pay 100 of health insurance
costs for exempt employees, but only 40 or 60
of health insurance premiums for hourly
employees. Now, many employers reverse that
proportion, paying 70 for hourly employees and
30 for exempt employees. Their reasoning is
that salaried management employees can better
afford higher health insurance policies than
hourly workers. However, either arrangement would
still be legal.
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The usual caution about illegal discrimination
applies. Employees in the same position should
have the same benefits, including having the
company pick up the tab for the same percentage
of health insurance premiums. When an
employer offers different working conditions or
benefits to different employees in the same or
similar jobs, that creates de facto
discrimination, even if it was not the employers
intention to discriminate. 
It would be unwise for an employer to negotiate
this benefit on a case-by-case basis with new
hires, because it can create illegal
discrimination.
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For example, paying a higher percentage of the
health insurance premium for one employee who is
an Asian female results in de facto
discrimination against non-Asian employees, or
male employees, who have fewer benefits. For this
reason, the employer should pay the same
percentage of the health care premium for all
employees in a similar job. Rather than
negotiate insurance premiums with a new hire, it
is wiser for the employer to simply negotiate a
salary increase to cover the insurance premium in
a competitive situation. Example Ling is
uniquely qualified as a programmer for a
particular job. The employer is very motivated to
hire her, but Lings current employer pays 100 of
her health insurance premium.
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This employer pays only 50 of the health
insurance premium for programmers. Rather than
negotiating the premium, it is wiser for the
employer to agree to increase the salary offered
to Ling by an amount equal to the health
insurance premium she will pay.
Thank You!
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