Here are some insights into health-insurance premium reimbursements for employees who have access to other coverage:
I recently asked readers if any of them had gotten paid for declining their company’s health insurance. The answer for many was yes: Unions negotiate the benefit for state and government employees and some employers offer it because it saves them money. The caveat is that employers only can offer reimbursements for not enrolling in their health plan if they are absolutely certain the employee has other coverage.
The explanatory letters from readers:
“I received a one-time payment for not taking health care from a Chicago publishing company I worked for.”
“I’m a state employee in New Jersey. I declined health benefits because my husband has a better plan. I was surprised that each year I receive 50 percent of the money they would have spent on health care for me.”
“In California, it’s common to split the savings with employees who have dual coverage. I work for the state and my wife covers me. I pocket $140 a month. My son works for a private company. He’s covered by his wife and gets $100 a month for not using the company’s health care plan. It’s a smart move on the part of employers.”
“I am a union member working for a nonprofit agency in Illinois. Under our union contract, it states that `employees who are able to obtain health insurance elsewhere are eligible to receive a monthly cash bonus as an incentive to opt out of the plan.’ We get 60 percent of the cost of a single premium. Another benefit of union membership!”
“Some companies require that employees who are eligible for coverage through a spouse at another company must take the spouse’s coverage–then they may or may not pay them for waiving off. Some companies will do anything not to pay claims.”
“In regard to declining to take medical benefits: Many cafeteria plans are designed to provide that option.”
“You can only opt out with proof you are covered by another plan.”
“My wife and I both are employed and I carry the medical insurance. She gets $1,000 a year for opting out.”
“If the value of these benefits were to be given as income, then the employer and employee might have to pay taxes on this money. Being a health insurance agent for over 30 years, I’ve had many employers ask about this and I’ve always advised against it.”
“Both my previous and current employers offer this payback. The benefit is around $1,500, which is about one-third of the employer’s cost for providing health insurance to an employee.”
The importance of having health-care coverage cannot be overestimated, according to The Commonwealth Fund, a non-profit research foundation in Washington that specializes in health and social issues. Its recent survey of 3,508 adults shows that “being without health insurance coverage, even for a short time, can have long-term health and economic consequences’ for the individual.
The survey “sounds a clear warning about gaps in the U.S. health-care system as unemployment rises and more Americans lose their health care coverage.”
As for me, I’ve never understood why you have to have a job in order to have affordable health insurance.
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Carol Kleiman’s column also appears in Tuesday’s Business and Wednesday’s Working sections. Watch her Career Coach segments on CLTV. Send e-mail to [email protected].