Health Insurance Policies
Health Insurance Policies When an employer offers health insurance to employees and offers to pay a certain percentage, can the employer choose to pay different percentages for different employees or does the percentages have to be the same for all employees? An employer can legally offer different benefits to employees with different jobs, as long as that does not result in de facto discrimination.
It is very common for an employer to pay one percentage of health insurance costs for hourly employees, and a different percentage for exempt employees. A decade or so ago, it was common for employers to pay 100% of health insurance costs for exempt employees, but only 40% or 60% of health insurance premiums for hourly employees. Now, many employers reverse that proportion, paying 70% for hourly employees and 30% for exempt employees. Their reasoning is that salaried management employees can better afford higher health insurance policies than hourly workers. However, either arrangement would still be legal.
The usual caution about illegal discrimination applies. Employees in the same position should have the same benefits, including having the company pick up the tab for the same percentage of health insurance premiums. It would be unwise for an employer to negotiate this benefit on a caseby-case basis with new hires, because it can create illegal discrimination. When an employer offers different working conditions or benefits to different employees in the same or similar jobs, that creates de facto discrimination, even if it was not the employers intention to discriminate.
For example, paying a higher percentage of the health insurance premium for one employee who is an Asian female results in de facto discrimination against non-Asian employees, or male employees, who have fewer benefits. For this reason, the employer should pay the same percentage of the health care premium for all employees in a similar job. Rather than negotiate insurance premiums with a new hire, it is wiser for the employer to simply negotiate a salary increase to cover the insurance premium in a competitive situation. Example: Ling is uniquely qualified as a programmer for a particular job. The employer is very motivated to hire her, but Lings current employer pays 100% of her health insurance premium.
This employer pays only 50% of the health insurance premium for programmers. Rather than negotiating the premium, it is wiser for the employer to agree to increase the salary offered to Ling by an amount equal to the health insurance premium she will pay.
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