Comments on: benefit cut

Question: benefit cut

anadem — Mon, 14 Nov 2005 10:48:24 -0800

My employer has decided to stop paying any dependent health insurance coverage. How do I respond?

In my case it's a reduction in my remuneration of over $1000/month. Our twelve-person Californian company was spun off as independent a month ago. Of those with dependents only one other has a spouse without their own cover, so this cost-saving really only affects him and me.

I'd prefer to stay with this job -- location & people are good, and pay is reasonable though not top-of-the-line, and because I'm a 62 year old programmer with no degree finding a new job might be tough.

I should find out if the insurance cuts are temporary, and whether there will be any substitute reward offered e.g. stock options? What else should I think about before talking to the boss?

By: jon_kill

jon_kill — Mon, 14 Nov 2005 10:59:05 -0800

I would work about $1000/month less hard.

By: stet

stet — Mon, 14 Nov 2005 11:00:12 -0800

Demand a $1,000 a month raise.

By: MarkAnd

MarkAnd — Mon, 14 Nov 2005 11:10:54 -0800

It sounds like a reasonably expensive plan -- are the health plan benefits good? One thing you might suggest is that at the next renewal, the company switch to a less generous, less expensive policy for all employees, and return to paying some portion of the family medical premium. It might be possible to keep the employer costs level and have it affect all employees equally. Of course, they might not be at all interested in this, but it's another possible suggestion.

By: SteveInMaine

SteveInMaine — Mon, 14 Nov 2005 11:11:18 -0800

I'm fortunate enough to have dependent coverage at my current job, but it's my understanding that this perk's becoming more rare. The last time our insurance company had a rate increase, the company's response was to have the deductible incrreased. The difference in rates was significant enough that the only effect to employees is we were told to bring in the doctor's bill with the higher deductible and the company will pay it directly, rather than through insurance.

Assuming you have a good relationship with your boss, the questions you're asking don't seem unreasonable. You might want to phrase the question open-ended, like: "Is there anything the company can do to help make up the difference?"

By: acoutu

acoutu — Mon, 14 Nov 2005 11:11:34 -0800

Prepare your resume. Alert your contacts. Start looking for another job. Consider just how stable this new arrangement is. Once you've tested the waters, put together a plan that will save your employer $12,000 a year and then ask for the raise.

By: blue mustard

blue mustard — Mon, 14 Nov 2005 11:19:59 -0800

Shop around for other work. Even if you don't want to leave, having no options means you have little leverage. And who knows, perhaps you'll even find something better.

Also try to negotiate a raise to help compensate for the loss of benefits. If you don't want to leave, anything above $0 is better than nothing. I might try arguing for the status quo: convince your management to pay you whatever they paid for your premiums this year, and you would pay whatever the annual increase is.

By: five fresh fish

five fresh fish — Mon, 14 Nov 2005 11:21:42 -0800

You just had your pay reduced by $12k/yr.

How much do you really want to stay with this employer?

By: WestCoaster

WestCoaster — Mon, 14 Nov 2005 12:16:18 -0800

will be any substitute reward offered e.g. stock options?

A twelve-person company isn't likely to go public anytime in the foreseeable future (it would need to grow enormously for an IPO to be feasible). Stock options (and even stock) are (essentially) worthless if a stock isn't publicly traded, unless a company makes other provisions for valuing them and buying them back.

By: xammerboy

xammerboy — Mon, 14 Nov 2005 12:59:15 -0800

Talk to your boss. Seriously. It's the totally reasonable thing to do. If he's not going to recompense you - leave.

By: miss tea

miss tea — Mon, 14 Nov 2005 13:44:26 -0800

When you talk to your boss, make it clear that you understand that insurance costs are high and continuing to rise. Share any quotes you've received for independent coverage for your wife, and ask whether it would be possible for them to cover an alternate or cafeteria plan for dependents. Blue mustard's suggestion is also a good one.

By: phearlez

phearlez — Mon, 14 Nov 2005 15:05:24 -0800

What are you willing to do to stay in this job? I apologize for the following statement/parallel in advance My mother is a few years older than you and when my father was pushed into early retirement a few years ago she went to work at Starbucks. If she never made a dime there it would be worth it for the quality and cost of health care she has made available to her by virtue of working for them.

But make sure you get something, even out of pocket. 61 days is the magic number for HIPAA "continuous coverage" qualification and unfortunately your age is going to incline some sellers to try to cherry-pick around you.

By: five fresh fish

five fresh fish — Mon, 14 Nov 2005 16:01:27 -0800

$12 000 must account for fully about one-fifth of your pay.

Either your previous pay was miles too high, or your boss respects you so little that he'll cut you down by a fifth yet still expect the same value of output.

If you can rationalize it as the former, then I guess you should be elated that you got away with it in the first place. You were making out like a bandit!

By: MarkAnd

MarkAnd — Tue, 15 Nov 2005 11:22:33 -0800

61 days is the magic number for HIPAA "continuous coverage" qualification and unfortunately your age is going to incline some sellers to try to cherry-pick around you.

63.