Is this a legal HR practice?
January 26, 2006 11:23 AM Subscribe
HR Question: My company currently pays 100% of our health insurance premiums, even for dependents. However, due to rising costs, they must amend this. The current plan is to cover 50% of the health insurance premium, including dependents, the employee to cover the rest. The kicker and question I have about the legality is this:
Is it legal for them to pay 50% of Worker X and his three dependents (wife and 2 kids) and only 50% of my premium (with no dependents)? In a sense, Worker X is getting a larger benefit because he has dependents. While this was "ok" when 100% of the coverage was taken care of, it pisses me off that they will cover 50% of a co-workers kids and not 100% of me....When the cost will ultimately be less! Can they do this legally?
Is it legal for them to pay 50% of Worker X and his three dependents (wife and 2 kids) and only 50% of my premium (with no dependents)? In a sense, Worker X is getting a larger benefit because he has dependents. While this was "ok" when 100% of the coverage was taken care of, it pisses me off that they will cover 50% of a co-workers kids and not 100% of me....When the cost will ultimately be less! Can they do this legally?
...or they can offer none at all - they are under no obligation to insure your health.
posted by DandyRandy at 11:41 AM on January 26, 2006
posted by DandyRandy at 11:41 AM on January 26, 2006
HR is not the bad guy here. The villain is us. Until we recognize that health care, like national defense, transportation, and education, is a basic right, worthy of taxpayer funding, we will continue to see increasing numbers of us without health insurance, or even access to life-saving health care.
For those of you thinking, "I've got mine; let the others fend for themselves," think again. You, or someone close to you, is just a union contract renewal, or a legislative vote, or a board of directors' decision, or a boss's whim away from losing your health insurance.
Just as we pool our resources as a society to buy jet fighters, K-12 education, and highways for all to use, we need to set aside ideological differences and self interest to make sure all of us can get basic health care and insurance.
posted by mmdei at 11:43 AM on January 26, 2006
For those of you thinking, "I've got mine; let the others fend for themselves," think again. You, or someone close to you, is just a union contract renewal, or a legislative vote, or a board of directors' decision, or a boss's whim away from losing your health insurance.
Just as we pool our resources as a society to buy jet fighters, K-12 education, and highways for all to use, we need to set aside ideological differences and self interest to make sure all of us can get basic health care and insurance.
posted by mmdei at 11:43 AM on January 26, 2006
You didn't say where you are, but it probably doesn't matter.... It's almost certainly legal. In the US, companies do this all the time, including mine. Not only is it legal, it's somewhat common.
You can solve this problem, of course, by having some kids. Voila, you and your coworker can be equal again.
If it makes you feel any better, I doubt your coworkers is happy that he/she now has "more benefits" than you. The bite on his/her paycheck is going to be several times the bite on yours.
posted by blue mustard at 11:51 AM on January 26, 2006
You can solve this problem, of course, by having some kids. Voila, you and your coworker can be equal again.
If it makes you feel any better, I doubt your coworkers is happy that he/she now has "more benefits" than you. The bite on his/her paycheck is going to be several times the bite on yours.
posted by blue mustard at 11:51 AM on January 26, 2006
Unless your health care benefts are spelled out in your contract, then yes, of course they can do it. Your coworker is still getting the same benefit as you - half of his costs are subsidized, just like yours are. Just because the dollar amount is different doesn't make it unfair. Do you really think it would be fair to cover 50% of your coworker's premiums and 100% of yours?
posted by boomchicka at 11:51 AM on January 26, 2006
posted by boomchicka at 11:51 AM on January 26, 2006
If you look at it that way, psususe, your co-worker was getting a bigger benefit than you back when the company was covering 100%, too. Almost certainly, his premiums were higher than yours. But, IMHO, that's a fairly selfish way to look at it. You can say he's getting a larger benefit but, owing to the additional family members, he also has larger expenses.
posted by Thorzdad at 11:54 AM on January 26, 2006
posted by Thorzdad at 11:54 AM on January 26, 2006
mmdei wrote: "Just as we pool our resources as a society to buy jet fighters . . . for all to use, . . . ."
Awesome! When's my turn? Sounds like fun.
Seriously, though, until we have mmdei's socialist medicine utopia (as we all know, a very complicated issue), companies have a lot of leeway as to what benefits they offer. Is it legal? Sure, unless there's any contract which says otherwise. Is it fair? Depends a lot on your point of view. Worker X probably thinks so.
posted by JMOZ at 11:54 AM on January 26, 2006
Awesome! When's my turn? Sounds like fun.
Seriously, though, until we have mmdei's socialist medicine utopia (as we all know, a very complicated issue), companies have a lot of leeway as to what benefits they offer. Is it legal? Sure, unless there's any contract which says otherwise. Is it fair? Depends a lot on your point of view. Worker X probably thinks so.
posted by JMOZ at 11:54 AM on January 26, 2006
Agree 100% with mmdei about the real issue here: why on earth doesn't the largest, wealthiest industrialized democracy on earth provide basic healthcare for all its residents? Your coworkers-with-kids and even your company are not the ones who are fucking you over. Seriously.
As for the specific question: yes, it's entirely legal. And as for your coworkers getting a "bigger" benefit than you: well, not really. Say that the cost (at 100%) of insuring an individual at your company is $200/mo., and the cost of insuring a family is $600/mo. Your out-of-pocket cost under this new plan is $100, while your coworker's out-pocket-cost is $300 -- 3 times as much as you're paying, though of course there's no guarantee that they're compensated at 3 times the rate you are.
posted by scody at 11:55 AM on January 26, 2006
As for the specific question: yes, it's entirely legal. And as for your coworkers getting a "bigger" benefit than you: well, not really. Say that the cost (at 100%) of insuring an individual at your company is $200/mo., and the cost of insuring a family is $600/mo. Your out-of-pocket cost under this new plan is $100, while your coworker's out-pocket-cost is $300 -- 3 times as much as you're paying, though of course there's no guarantee that they're compensated at 3 times the rate you are.
posted by scody at 11:55 AM on January 26, 2006
Oh, and just by way of illustrating how varied these plans can be: I work at an organization where individual coverage is free, but spousal/family coverage costs.
posted by scody at 12:00 PM on January 26, 2006
posted by scody at 12:00 PM on January 26, 2006
JMOZ, you mean... just like we have a socialist defense utopia?
A good military is one that prevents trouble, heartache, disruption in daily life for its citizens by carrying a big stick; Good medical care is practiced with an eye towards preventive medicine, that is, preventing trouble, heart-attack, and disruption in daily life. The goal of each seems very similar. Heck, the company building the tech behind the curtains of each are often the same folks. They won't hurt that badly if we shift their budget a bit ;)
(disclosure: my first post was written by my father, a doctor.)
posted by mmdei at 12:10 PM on January 26, 2006
A good military is one that prevents trouble, heartache, disruption in daily life for its citizens by carrying a big stick; Good medical care is practiced with an eye towards preventive medicine, that is, preventing trouble, heart-attack, and disruption in daily life. The goal of each seems very similar. Heck, the company building the tech behind the curtains of each are often the same folks. They won't hurt that badly if we shift their budget a bit ;)
(disclosure: my first post was written by my father, a doctor.)
posted by mmdei at 12:10 PM on January 26, 2006
Well if it were illegal it wouldn't be an issue related to your employment contract.
It's true that under the ridiculous system you have no right to receive health insurance. And if your employer decides they're only paying for health insurance for people with flat feet, or only for people with unattached earlobes or only if your shoe size added to the length of your pinky in millimetres is an even number.
But that's not to say that they can choose to provide different benefits for any reason they choose. There are some reasons that just aren't allowed to make a difference. This is discrimination on the basis of marital and family status. Do human rights statutes wherever you are prohibit discrimination on those grounds?
If so, talk to a lawyer and see if there's a case to be made. If not (or hell, regardless), talk to your congress reps and senators about how ridiculous it is to continue supporting a system where this sort of situation is possible.
posted by duck at 12:12 PM on January 26, 2006
It's true that under the ridiculous system you have no right to receive health insurance. And if your employer decides they're only paying for health insurance for people with flat feet, or only for people with unattached earlobes or only if your shoe size added to the length of your pinky in millimetres is an even number.
But that's not to say that they can choose to provide different benefits for any reason they choose. There are some reasons that just aren't allowed to make a difference. This is discrimination on the basis of marital and family status. Do human rights statutes wherever you are prohibit discrimination on those grounds?
If so, talk to a lawyer and see if there's a case to be made. If not (or hell, regardless), talk to your congress reps and senators about how ridiculous it is to continue supporting a system where this sort of situation is possible.
posted by duck at 12:12 PM on January 26, 2006
How is this discrimination? Every employee is receiving the same percentage regardless of marital or family status. They could have done it differently, for example, providing $X to each employee toward the cost of premiums, and that would be better for the single employee. But neither is discriminatory.
I agree that the US health insurance system is ridiculous, and our congresspeople need to hear about it. But the benefits situation here is legal, very common, and not a good basis for a discrimination complaint.
posted by expialidocious at 12:27 PM on January 26, 2006
I agree that the US health insurance system is ridiculous, and our congresspeople need to hear about it. But the benefits situation here is legal, very common, and not a good basis for a discrimination complaint.
posted by expialidocious at 12:27 PM on January 26, 2006
HR is not the bad guy here. The villain is us.
While I agree 100% with everything Dr mmdei's Dad had to say here, and the universal single payer is really the only fair and realistic way to go, I'd add one other thing:
Insurance is a for-profit business. In 2004 the CEO of Anthem Blue Cross/Blue Shield got a bonus of 42.5 million dollars, at the same time they raised premiums an average of 15% across the 10 states where Anthem products were offered. Other companies have seen similar rate increases over the past few years, along with similar compensation packages to upper management, and dividends to stock holders.
psususe, I feel your pain, I really do -- but count your lucky stars that your employer was able to keep an insurance product for its employees at all. Many employers nationwide are being forced to drop their insurance benefit all together.
posted by anastasiav at 12:28 PM on January 26, 2006
While I agree 100% with everything Dr mmdei's Dad had to say here, and the universal single payer is really the only fair and realistic way to go, I'd add one other thing:
Insurance is a for-profit business. In 2004 the CEO of Anthem Blue Cross/Blue Shield got a bonus of 42.5 million dollars, at the same time they raised premiums an average of 15% across the 10 states where Anthem products were offered. Other companies have seen similar rate increases over the past few years, along with similar compensation packages to upper management, and dividends to stock holders.
psususe, I feel your pain, I really do -- but count your lucky stars that your employer was able to keep an insurance product for its employees at all. Many employers nationwide are being forced to drop their insurance benefit all together.
posted by anastasiav at 12:28 PM on January 26, 2006
How is this discrimination? Every employee is receiving the same percentage regardless of marital or family status. They could have done it differently, for example, providing $X to each employee toward the cost of premiums, and that would be better for the single employee. But neither is discriminatory.
I didn't say it was illegal, just that this would be the only grounds that I could think of on which it might be. It treats people differently (gives them different amounts of money) based on their marital status and family. That's how its discriminatory.
As you point out, the other method would also be discriminatory because it would treat people differently (pay a different percentage of premiums) based on their marital and family status.
So since they obviously have to pick one method or the other, I assume that even if discrimination on the basis of marital or family status is illegal where the OP is located, there's some understanding/legal precedent/regulation indicating in which sense (amount or percent or either) people must be treated similarly regardless of martial or family status. Which is why I said if such discrimination is illegal, the OP would require a lawyer to figure out if this would qualify as an example of such discrimination.
My intent wasn't to say this is illegal but to suggest investigating angles other than the employment contract or regulations pertaining specifically to health insurance or benefits.
posted by duck at 12:34 PM on January 26, 2006
I didn't say it was illegal, just that this would be the only grounds that I could think of on which it might be. It treats people differently (gives them different amounts of money) based on their marital status and family. That's how its discriminatory.
As you point out, the other method would also be discriminatory because it would treat people differently (pay a different percentage of premiums) based on their marital and family status.
So since they obviously have to pick one method or the other, I assume that even if discrimination on the basis of marital or family status is illegal where the OP is located, there's some understanding/legal precedent/regulation indicating in which sense (amount or percent or either) people must be treated similarly regardless of martial or family status. Which is why I said if such discrimination is illegal, the OP would require a lawyer to figure out if this would qualify as an example of such discrimination.
My intent wasn't to say this is illegal but to suggest investigating angles other than the employment contract or regulations pertaining specifically to health insurance or benefits.
posted by duck at 12:34 PM on January 26, 2006
We will never reform healthcare in this country as long as we keep giving giving our Congressional representatives the best healthcare money (Our money!) can buy. Want to see them get serious about healthcare? Let the start paying for their own!
posted by any major dude at 12:56 PM on January 26, 2006
posted by any major dude at 12:56 PM on January 26, 2006
my employer dropped dependent coverage entirely at the start of this year, 100% gone. So if you've got 50% left you're doing better than some.
Adding to mmdei's comment on government-provided healthcare: it is not only a matter of looking after the individual, but a matter of keeping us all healthy. Unattended health problems hurt us all, and can spread, and healthcare is in the same category as public sanitation and all the other goods that decent government provides.
posted by anadem at 1:17 PM on January 26, 2006
Adding to mmdei's comment on government-provided healthcare: it is not only a matter of looking after the individual, but a matter of keeping us all healthy. Unattended health problems hurt us all, and can spread, and healthcare is in the same category as public sanitation and all the other goods that decent government provides.
posted by anadem at 1:17 PM on January 26, 2006
you should reframe the issue this way:
your coworker isn't getting more benefits than you -- rather, you have benefits you aren't using!
shit! get on that man! start popping out babies and gay marrying people!
posted by fishfucker at 1:32 PM on January 26, 2006
your coworker isn't getting more benefits than you -- rather, you have benefits you aren't using!
shit! get on that man! start popping out babies and gay marrying people!
posted by fishfucker at 1:32 PM on January 26, 2006
To reiterate fishfucker. If your co worker wears glasses and you have 20/20 vision your not being discriminated against because you aren't making use of your vision benefit.
posted by Mitheral at 2:35 PM on January 26, 2006
posted by Mitheral at 2:35 PM on January 26, 2006
Well, to fishfucker and Mitheral (with whom I agree), the counter-proposal made by people who think that, yes, indeed, people with 20/20 vision are being discriminated against is those flexible medical expense accounts that some people have.
But yeah, as a guy with a family and poor vision, it ain't my fault you don't use your potential benefits.
posted by GuyZero at 2:38 PM on January 26, 2006
But yeah, as a guy with a family and poor vision, it ain't my fault you don't use your potential benefits.
posted by GuyZero at 2:38 PM on January 26, 2006
Just to correct a misconception above, as a general rule, employers can't pick and choose among full-time employees in terms of benefit offerings. Whatever the employer offers, it has to offer to all full-time employees.
The federal law which regulates health care coverage (called ERISA) pre-empts state and local laws, so many kinds of local discrimination laws simply don't apply to health care benefits.
posted by MattD at 6:56 PM on January 26, 2006
The federal law which regulates health care coverage (called ERISA) pre-empts state and local laws, so many kinds of local discrimination laws simply don't apply to health care benefits.
posted by MattD at 6:56 PM on January 26, 2006
You, or someone close to you, is just a union contract renewal, or a legislative vote, or a board of directors' decision, or a boss's whim away from losing your health insurance.
Not true. Employer-paid health insurance is not some sort of god-given right. There seems to be an awful lot of people who think that:
a. without health insurance, you can not receive medical care
b. unless your employer pays for it, you can't receive health insurance
Both are false. If you don't have insurance, you can indeed receive healthcare services. And if your employer doesn't offer health benefits, you are free to purchase such insurance just as you would auto insurance.
posted by davidmsc at 8:27 PM on January 26, 2006
Not true. Employer-paid health insurance is not some sort of god-given right. There seems to be an awful lot of people who think that:
a. without health insurance, you can not receive medical care
b. unless your employer pays for it, you can't receive health insurance
Both are false. If you don't have insurance, you can indeed receive healthcare services. And if your employer doesn't offer health benefits, you are free to purchase such insurance just as you would auto insurance.
posted by davidmsc at 8:27 PM on January 26, 2006
I agree with everything that both mmdeis wrote. As long as we keep the current insurance-company-enrichment scheme, we're all going to be losers.
MattD is mistaken, at least as far as companies' offering different coverage for dependents. It happens all the time. My wife's company pays most of her premium, and part of the dependents (coverage of which is at a flat premium). My company pays all of mine, but a smaller part of my dependent's (coverage of which is at a premium scaled to the number of dependents).
posted by Kirth Gerson at 3:21 AM on January 27, 2006
MattD is mistaken, at least as far as companies' offering different coverage for dependents. It happens all the time. My wife's company pays most of her premium, and part of the dependents (coverage of which is at a flat premium). My company pays all of mine, but a smaller part of my dependent's (coverage of which is at a premium scaled to the number of dependents).
posted by Kirth Gerson at 3:21 AM on January 27, 2006
Kirth, I'm not mistaken at all. Each company can offer whatever benefits it wants, and your wife's company can offer something entirely different from your company in the structure of the offerings and the degree of dependent subsidiry, but each of those companies must offer whatever they offer to all of their full-time employees.
posted by MattD at 4:11 AM on January 27, 2006
posted by MattD at 4:11 AM on January 27, 2006
Is there discrimination in my company because not everybody makes the exact same salary?
posted by EiderDuck at 5:59 AM on January 27, 2006
posted by EiderDuck at 5:59 AM on January 27, 2006
davidmsc: "If you don't have insurance, you can indeed receive healthcare services. And if your employer doesn't offer health benefits, you are free to purchase such insurance just as you would auto insurance."
I'm a hard-working lower-middle-class fellow. Two years ago, while uninsured, my family incurred over $40,000 in medical expenses. This was more than our yearly pre-tax income, but we didn't qualify for any assistance of any kind (and believe you me, we looked everywhere). The "social services" office at the hospital lamented that if only I had quit my job before we sought care, we could have had help.
Yes, we did receive care (and everything turned out medically fine), but we'll be paying it for it for as far as I can see. I was able to cut some deals and take out a ton of loans, but there was a very real possibility of us losing our home until I got the bills out of the hospital's hands.
And yes, we could have bought insurance, but the cheapest rate quoted to us was more than our mortgage payments. When buying individual car insurance, your rates are determined by the choices you have made as a driver, as well as what group of drivers you belong to. When buying individual health insurance, your rates are determined by things you have no control over and you stand alone as an individual. The two are not equivalent.
On a happier note, after witnessing what I went through, my employer started offering full health insurance to all employees and dependents. Four months too late for me, but at least I don't have to worry about it happening again. (Incidentally, since employers get to buy into group insurance, my family's rates are one fifth what they would have been if we were to buy the same coverage ourselves.)
posted by ewagoner at 7:15 AM on January 27, 2006
I'm a hard-working lower-middle-class fellow. Two years ago, while uninsured, my family incurred over $40,000 in medical expenses. This was more than our yearly pre-tax income, but we didn't qualify for any assistance of any kind (and believe you me, we looked everywhere). The "social services" office at the hospital lamented that if only I had quit my job before we sought care, we could have had help.
Yes, we did receive care (and everything turned out medically fine), but we'll be paying it for it for as far as I can see. I was able to cut some deals and take out a ton of loans, but there was a very real possibility of us losing our home until I got the bills out of the hospital's hands.
And yes, we could have bought insurance, but the cheapest rate quoted to us was more than our mortgage payments. When buying individual car insurance, your rates are determined by the choices you have made as a driver, as well as what group of drivers you belong to. When buying individual health insurance, your rates are determined by things you have no control over and you stand alone as an individual. The two are not equivalent.
On a happier note, after witnessing what I went through, my employer started offering full health insurance to all employees and dependents. Four months too late for me, but at least I don't have to worry about it happening again. (Incidentally, since employers get to buy into group insurance, my family's rates are one fifth what they would have been if we were to buy the same coverage ourselves.)
posted by ewagoner at 7:15 AM on January 27, 2006
Is there discrimination in my company because not everybody makes the exact same salary?
Yes, you see, "to discriminate" means to draw a distinction between two things (in this case employees) and thus to treat them differently. There's nothing inherently wrong with discrimination.
What makes discrimination sometimes wrong and sometimes illegal is the grounds on which the discrimination occurs. There are some grounds on which it is considered wrong to discriminate and some on which it is illegal to discriminate.
In the case of your company, the discrimination is likely to be occurring based on seniority, qualifications, job title, and things like that. These are generally accepted and legal grounds on which to discriminate. If your company is paying people differently based on grounds that are illegal where you are, (probably things like race, skin colour, sex, gender, sexual orientation, marital status, family status, country of origin, etc.) then it's illegal.
As for the OP, I think the person who said "you all get the same benefits, but the OP just isn't using some of his benefits" got it right. And thus I retract my earlier statement that this may be considered discrimination on the grounds of family and marital status since they are all offered the benefits to dependents and thus all treated the same.
posted by duck at 7:36 AM on January 27, 2006
Yes, you see, "to discriminate" means to draw a distinction between two things (in this case employees) and thus to treat them differently. There's nothing inherently wrong with discrimination.
What makes discrimination sometimes wrong and sometimes illegal is the grounds on which the discrimination occurs. There are some grounds on which it is considered wrong to discriminate and some on which it is illegal to discriminate.
In the case of your company, the discrimination is likely to be occurring based on seniority, qualifications, job title, and things like that. These are generally accepted and legal grounds on which to discriminate. If your company is paying people differently based on grounds that are illegal where you are, (probably things like race, skin colour, sex, gender, sexual orientation, marital status, family status, country of origin, etc.) then it's illegal.
As for the OP, I think the person who said "you all get the same benefits, but the OP just isn't using some of his benefits" got it right. And thus I retract my earlier statement that this may be considered discrimination on the grounds of family and marital status since they are all offered the benefits to dependents and thus all treated the same.
posted by duck at 7:36 AM on January 27, 2006
ewagoner, I'm glad that you & your family are OK, and it's terrible that you had to experience what you went throught. Believe me, I was NOT arguing that "life is perfect" or that the US healthcare system makes sense, or is otherwise fair. I know very well that it is broken. I was only pointing out that some assumptions that people make about healthcare and insurance are not exactly true.
posted by davidmsc at 11:11 AM on January 29, 2006
posted by davidmsc at 11:11 AM on January 29, 2006
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posted by cushie at 11:24 AM on January 26, 2006