30 Second Insurance Tips©

Tip #339- What Do You Think?

Large employers – often school districts or municipalities – have one set of health insurance plans for employees covered under collectively bargained contracts, distinct from those offered to non-union employees.
That seems to be the basis for clients and prospects asking me if they can offer different benefits by “class” of employees.
The answer is yes for certain lines of coverage, such as group life or disability.
For health insurance, the answer is more nuanced.
Alex is a business owner who wants to pay 50% of the employee (only) health plan premium for his 125 unskilled hourly workers but 80% of the total premium (employee and dependents) for salaried managers and sales people.
Can he do that?
An employer “must exercise due diligence to ensure benefits are not discriminatory” but canuse “bona fide employment based classifications” such as hire dates, years of service, exempt or non-exempt as the basis for offering different benefits or charging more for the same benefits. Source: Employee Benefits Security Administration (EBSA).
So, what do you think of Alex’ Plan.
P.S. The 25th is Small Business Saturday; there are 445,445 of us in Wisconsin! Want to compare notes on health insurance? Stop in at our Mequon office. (Well, not all of you!)