Health Insurance reimbursement

December 14, 2009 10:34 AM

What examples can I cite to convince my employer to continue reimbursing my 3rd party health care?

I’ve been employed for 6 years at a 12-person NYC non-profit (FWIW, 3rd longest in tenure). For the first 5 years, I had the company insurance policy, paid in full by the company. After I married, I switched insurance to my spouse’s policy, which we paid 100% (via pretax deduction from her salary paychecks). My company reimbursed me the added costs we incurred from my wife’s employer, up to the amount they would have paid had I been on their insurance.

Now, in conjunction with a merit-based salary raise, they want to stop reimbursing. I am free to rejoin the original company insurance, which I would do, meaning there is no cash savings to my company. As far as I’ve been told, it is simply a move to keep the books cleaner and more simple.

My problem is that I now have to cancel and re-instate insurance policies, and inform all my doctors, etc. Plus, the advantage of being on my spouse’s policy was (slightly) better benefits, and the simplicity of having 1 family policy for the 2 (sooner or later 3) of us.

What examples can I cite or arguments can I make to convince my employer to continue this cash-neutral situation my way? Are there companies that document their flexibility with compensation packages (salary, health ins., other)? Am I crazy for wanting this setup? "People say" that non-profits cannot offer salaries that are competitive to the private sector, but the allure is (in addition to doing good) they can offer greater flexibility to employees to keep good talent.

posted by slagerst to Work & Money (4 answers total)

Ask them whether, in lieu of the reimbursement, you can have an additional raise or bonus in the amount in question. That will simplify their books and give you the benefit you want. It doesn't much matter whether other organizations do this; it matters whether you can get the benefit (extra cash to pay your insurance bill) in a way that satisfies their concerns (reduced bookkeeping).
posted by decathecting at 10:43 AM on December 14, 2009

I'm not sure you can cite any examples - your employer is just doing what they think is best for them. The only thing you can really do is go to them and register that this will be a major inconvenience for you. If that doesn't sway them, then I can't imagine what sort of oblique reference to your leaving like not "keeping good talent" could do.
posted by TypographicalError at 10:58 AM on December 14, 2009

As I understand it you're covered by your spouse's insurance and your employer has been reimbursing you with 100% of the insurance contribution they would otherwise make. Frankly that's a pretty sweet deal. Many companies would just give you the choice of either taking their insurance or waiving coverage and receiving a cash payment significantly less than that coverage would cost. For example, if the company contributed $400/Month towards insurance they might offer $150/Month as an incentive to waive coverage.

Paying employees to waive coverage is a sensible thing for employers to do, if they don't then employees will simply sign up for insurance even though they're covered by their spouse (so they have double coverage). How much they offer to waive coverage is their choice. Your employer is at the very high end (basically 100%). Still, offering this incentive is a completely standard and business savvy (if the payment is less than the insurance cost) so its reasonable for you employer to find a way to do it correctly wrt their book-keeping.
posted by Long Way To Go at 10:59 AM on December 14, 2009

The closest option might be cafeteria style benefit plans. An employee could opt out of one benefit and use those points toward another benefit. You might opt out of health coverage, but select the top tier benefit in dental, eye glass and long term disability insurance. In companies where I've worked, unspent benefits were paid back at a pittance. Is there another benefit that you'd accept in lieu of health insurance?

It's important to note that offering a cafeteria benefit plan requires a fairly large number of employees. It's really not a fair comparison to ask a small firm to offer the same benefit options as a larger one.

BTW, I don't agree with your assumption that non-profits offer more flexibility. That certainly was not my experience.
posted by 26.2 at 1:58 PM on December 14, 2009