Coming Off of Group

[KCinsuranceguy]

I have a client that currently has group coverage. He will not be losing it but we're looking at putting him into an individual HSA plan. He's paying $640 (his portion) and the employer is paying $260 on top of that for a total $900.

My question is this: Is there a creative way to still have the employer pay that $260 still? Couldn't he just give him a raise for that amount? I mean, sure it would be taxed but....

I'm curious if this is a common thing when people are coming from group to individual and how to approach this with my customer if so. If there is anything else that I should know please let me know.

BTW- We will not be breaking up the group by taking him off so that's not an issue.

 

[souldeux]

So long as the full amount of the premiums comes out of the employee's personal account, there won't be an issue. Every employer I've worked with who partially subsidizes their employees' insurance costs without going on a group just gives their individual employees a raise equal to a set percentage of their premiums.

In the most recent example of this, an employer put her employees on individual plans and gave everyone a raise equal to 50% of their monthly premiums. Saved the employer about $1000/month on a four person group and got everyone more comprehensive coverage. Everyone wins!

 

[KCinsuranceguy]

Thanks for the info!

 

[djs]

Depends....
Is the employer dropping group coverage? If not, it is unlikely they will provide the premium to the employee in any manner, or else it causes other problems with inequity in pay.

Rules probably vary from state to state pretty significantly. In California, even if it's possible, without the employer subsidy, it's unlikely they will get similar coverage on an IFP for the money they are currently paying. They would end up with less 'features' and paying about the same. Why bother?


Dan