Is This Legal??

[magagent]

Our neighbors wife is starting a new job and their health insurance benefits package states "If your salary is under 50,000 and below you cant enroll in their high deductible health plans"... The health insurance is through United Healthcare.

She is planning on waiving the coverage anyway but still..

 

[leevena]

Yes, it can be legal. Is there any specific reason why you believe it is not, other than the fact that these plans are not available?

 

[magagent]

Yes, I want to know why an employer, can tell an employee which plan they can or can't enroll in! Clear enough??

Yes, it can be legal. Is there any specific reason why you believe it is not, other than the fact that these plans are not available?

 

[leevena]

Not really clear enough (do I detect a bit of sarcasm in your response?). I asked if there was a specific reason why you did not believe the employer and your reply was "Yes", but you did not give me a reason why.

As a general rule of thumb, the employer can deny an employee access to a plan that is sponsored by the employer. But there are situations where this may be illegal, which is why I asked "Is there any specific reason why your believe it is not". For example, is there a Collective Barganing Agreement (CBA) in place that does, or does not, allow the employee access to that plan? Is there an Employment agreement in place that does, or does not, allow access to that plan? How about underwriting considerations? For example, what if the HDHP is offered to only current employees and not future employees, which would usually be called a "frozen" plan.

Again, as a rule of thumb, yes the employer can do this. Now if there is any fact(s) that would preclude the employer from doing this, you would need to identify them.

 

[HarryDaBroker]

I don't think they can do it based on salary alone, however it can be based on classification of employee status; management/non-management, salaried/non-salary, etc. They do have to stay consistent within the classification status though.

 

[magagent]

Harry, she showed me the packet and it states "If your Salary is less than 35K, you are not elgible for our high deductible health plans". It states company rank does not matter, only your salary..

I don't think they can do it based on salary alone, however it can be based on classification of employee status; management/non-management, salaried/non-salary, etc. They do have to stay consistent within the classification status though.

 

[HarryDaBroker]

Harry, she showed me the packet and it states "If your Salary is less than 35K, you are not elgible for our high deductible health plans". It states company rank does not matter, only your salary..

what state is this and how many employees do they have?
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Harry, she showed me the packet and it states "If your Salary is less than 35K, you are not elgible for our high deductible health plans". It states company rank does not matter, only your salary..

Apparantly, it is not illegal as of now. Please see the following taken from the actual Health Care Reform document:

‘‘SEC. 2716. PROHIBITION OF DISCRIMINATION BASED ON SALARY.
‘‘(a) IN GENERAL.—The plan sponsor of a group health plan (other than a self-insured plan) may not establish rules relating to the health insurance coverage eligibility (including continued eligibility) of any full-time employee under the terms of the plan that are based on the total hourly or annual salary of the employee or otherwise establish eligibility rules that have the effect of discriminating in favor of higher wage employees.
‘‘(b) LIMITATION.—Subsection (a) shall not be construed to pro- hibit a plan sponsor from establishing contribution requirements for enrollment in the plan or coverage that provide for the payment by employees with lower hourly or annual compensation of a lower dollar or percentage contribution than the payment required of similarly situated employees with a higher hourly or annual com- pensation.

 

[magagent]

Thanks Harry. State is TN, and the corporation has around 5000 employees in the USA.

what state is this and how many employees do they have?
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Apparantly, it is not illegal as of now. Please see the following taken from the actual Health Care Reform document:

‘‘SEC. 2716. PROHIBITION OF DISCRIMINATION BASED ON SALARY.
‘‘(a) IN GENERAL.—The plan sponsor of a group health plan (other than a self-insured plan) may not establish rules relating to the health insurance coverage eligibility (including continued eligibility) of any full-time employee under the terms of the plan that are based on the total hourly or annual salary of the employee or otherwise establish eligibility rules that have the effect of discriminating in favor of higher wage employees.
‘‘(b) LIMITATION.—Subsection (a) shall not be construed to pro- hibit a plan sponsor from establishing contribution requirements for enrollment in the plan or coverage that provide for the payment by employees with lower hourly or annual compensation of a lower dollar or percentage contribution than the payment required of similarly situated employees with a higher hourly or annual com- pensation.

 

[leevena]

I don't think they can do it based on salary alone, however it can be based on classification of employee status; management/non-management, salaried/non-salary, etc. They do have to stay consistent within the classification status though.

As I mentioned prior, my response of "yes" was qualified as a general rule of thumb. I asked magagent if there was anything unusual about this (CBA, employement contract, etc.) and there was no further comment.

Contrary to what most people believe, fully insured plans can legally discriminate with respect to benefits, eligibility and costs. Section 105 applies to self-funded plans and does not allow for such actions.

Health Care Reform (PPACA) has contains language that will also require fully-insured plans to follow something similar, if not similar, to Section 105 requirements. This piece has been delayed.

 

[HarryDaBroker]

As I mentioned prior, my response of "yes" was qualified as a general rule of thumb. I asked magagent if there was anything unusual about this (CBA, employement contract, etc.) and there was no further comment.

Contrary to what most people believe, fully insured plans can legally discriminate with respect to benefits, eligibility and costs. Section 105 applies to self-funded plans and does not allow for such actions.

Health Care Reform (PPACA) has contains language that will also require fully-insured plans to follow something similar, if not similar, to Section 105 requirements. This piece has been delayed.

thx leevena says. just finished reading the entire h.r. 3962 doc. now time to read it one more time and get all the updates and find out what really happened. this entire doc is so ambiguous its ridiculous. hopefully i will be as abreast on the subject as you are sometime soon.