OK for Employer to Pay Employee's Spouse's Premiums?

Discussion in 'Health Insurance and Ancillary Benefits' started by Ambidexrtous, May 17, 2017.

  1. timamr
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    timamr Well-Known Member

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    You are correct in your assumption that I do not write group. However, the OP said less than 10 employee. I was basing my experience and answer on what he/she said. I am no expert in group sales as I only do ind. but most of my clients are smallbiz owners, mostly mom and pop, and when I do speak with a owner that has somewhere around 10 or less employees, I always hear from them how expensive it is.
     
  2. TN_agent
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    TN_agent Well-Known Member

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    Yeah, expensive when going from not paying anything on anyone to paying some on everyone, but the OP situation is different. This business is already chucking in a good portion of change for premiums, it just isn't for an employer-sponsored plan. Small group rates in our state (TN) are quite a bit better on basically identical benefits right now. Not to mention superior networks.
     
  3. rcduggan
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    rcduggan Well-Known Member

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    ^ what he said ;)
     
  4. NWBenefitProvider
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    NWBenefitProvider Well-Known Member

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    The owner of the company really needs to sit down with a qualified health insurance / employee benefit broker and sort this out. There are a lot of plans out there and many can be offered (at least in my area) for as little as 50% employer contribution.

    What you have is someone trying to take advantage of a situation by trying to get something for nothing. Very few small employers make contributions for covered dependents, so it would be status quo for the business to put in place a group plan and pay X amount for each employee and then if an employee wants to add a family member then they pay 100% of the premium for that additional person. If you do it right and add a POP 125 plan then the amount each employee contributes for their coverage can legally be taken pre-tax.

    I have very little patience for the people out there trying to screw over everyone else by trying to play these games. If it were me, I'd roll out a group plan and if you don't like it, then don't participate.

    If Mr. Me first kept up the complaining or trying to hold the group from getting a real group plan I'd send him packing. If you know what he's up to, then it isn't hard for the rest of the employees to also be aware that this guy is not willing to go along with what is in the interest of everyone.

    Rant over. Sorry.
     
  5. scagnt83
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    scagnt83 Well-Known Member

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    Agreed. But the business owner is the one who is really at fault here. One of 3 things are going on:
    1. He is not taking the time needed to fully vet what he is doing.
    2. He is being cheap and not paying for advice (although an insurance agent would tell him this for free... so #1 & #2 are essentially the same).
    3. He is purposely and knowingly violating Federal Regulations.

    Whichever one it is, he is negligent in his actions. He is risking fines, and even lawsuits from employees if the employees are assessed for unpaid taxes. And of course the moral aspect of screwing your employees with the IRS. Good news for the OP is that courts are now starting to make employers pay part of those unpaid taxes sometimes. But I dont know that there is any set rule on it at the moment. An employment law attorney would know.

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    It could be worse though. He could have fallen for the "Classic 105" scam that just got busted by the DOL/IRS.
     
  6. yorkriver1
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    yorkriver1 Well-Known Member

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    One possible advantage to at least some employees for the employer giving a no strings equally paid bonus that employees, at their option, can use to help pay for individual plans is for employees who could qualify for the tax credit. If the employer has a group plan, they can't qualify.
    If they are dropping a group plan, and the employer had been contributing a fixed amount per employee, then in fairness, the bonus should be "grossed up" to account for the employee's increased taxes on the bonus. Without advice from tax and insurance professionals this can be tricky.
     

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