New health insurance

[Dave Lehnert]

Warning!!!

THIS IS NOT A POST ABOUT THE NATIONAL HEALTH CARE DEBATE. SO PLEASE DO NOT GO THERE.

I work for a Fortune 500 company and we had our yearly insurance meeting.
Noticed a change that will not affect me because I have over 20 years in but for new hires into the company they will have to be employed for 3 years before their family members will be able to get health insurance.
I have never heard of this before. Is this something others have seen?

[Mitchell Andrus]

Well, if it's a fringe benefit... like teacher's tenure, some things have to be earned before you get them.

If you can't even buy into the company policy for 3 years... I'd contact a lawyer to see if that's legal in their state.
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[Paul Ryan]

Well, if it's a fringe benefit... like teacher's tenure, some things have to be earned before you get them.

If you can't even buy into the company policy for 3 years... I'd contact a lawyer to see if that's legal in their state.
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I second this. As important as the health care debate is today. Not allowing employees to purchase health care for their family from a companies provider may raise some eyebrows. If the insurance is provided free of charge for employees and their family I can certanly understand. That is a large benifit that not every employee deserves unless they have proved their loyalty and worth.

[Dennis McGarry]

If the plan is subsidized in anyway by the company, they can choose who other then the employee is eligible for coverage. Including when and for how much.

If there is a group plan, which most are, they are only obligated to offer it to the actual individual unless its a POS (point of service plan)

Companies are looking for any way they can to cost their own internal cost of health coverage, usually that means the costs are either passed on to the employee or parts are eliminated completly.

You said its a Fortune 500, shoot me a PM with the name, I along with spouse work for the company that handles 85% of all Fortune 500 compaines health insurance and with annual enrollment just around the corner, I might be able to dig up some more information..

[Mike Henderson]

At one time AT&T had a policy that a new employee had to pay for their health insurance for six months (I think it was) before the company picked it up. It was the company health policy but the employee had to pay all of the monthly costs.

All that meant was that we had to add a hiring bonus to pay for the six months of health insurance when we hired someone because otherwise they simply would not have accepted the job. It was a dumb, dumb, dumb policy - and so is your company's policy. The best people will go elsewhere if they have to pick up the cost for three years for their family. Or your company will only hire single people.

Those kind of decisions have unintended consequences.

Mike

[Dave Lehnert]

At one time AT&T had a policy that a new employee had to pay for their health insurance for six months (I think it was) before the company picked it up. It was the company health policy but the employee had to pay all of the monthly costs.

All that meant was that we had to add a hiring bonus to pay for the six months of health insurance when we hired someone because otherwise they simply would not have accepted the job. It was a dumb, dumb, dumb policy - and so is your company's policy. The best people will go elsewhere if they have to pick up the cost for three years for their family. Or your company will only hire single people.

Those kind of decisions have unintended consequences.

Mike

That was my thought. How would you ever hire anyone unless this is going to be a trend.
We noticed it in the meeting but was not too concerned with it as most of us has been with the company for a very long time and we have had a hiring freeze for over a year now.
We wondered if it was a misprint. Should have read 3 months , not years. 3 months would be common.

[Jeffrey Makiel]

Some companies require that you stay employed with them for a period of time before the company's group plan kicks in. Three years seems like a long time though. But, health care costs are in an upward spiral...at least here in New Jersey. Companies are looking for a way to reduce the burden, and with the labor market being tight, companies have the upper hand.

Many companies are also requiring new employees to pay a certain percentage of the premium. Even federal employees and government elected officials are required to pay 25% of the premium. However, these group rates are much, much lower than independent insurance for the self employed, unemployed and stay at home person.

The employer based health care model is very old in the US. It dates back to the Henry Ford era where he required all employees to buy suits, go to church, learn English, and have a bank account. However, things are changing and employer based health care is the last hold out. Remember employee pension plans?

Getting into a group rate plan within a fortune 500 company is one of the best deals around...even if you have to pay the full load. Often, pre-existing conditions is not an issue either.

-Jeff :)

[Joe Pelonio]

Most all employers are looking at ways to save money in these times. Mine is totally paid now, but starting January 1st we will have to pay about $75/month (for myself, and 3 dependents) but another alternative they considered, which may come up again is paying only for the employee, and dependents would be optional at our own expense at the group rates. The most common change I've heard of is to offer HMO paid, but other plans they pay the same as the HMO and you pay the difference.

[Jeffrey Makiel]

... but another alternative they considered, which may come up again is paying only for the employee....

Interesting, I thought I just saw something in the news that UPS is adopting this policy.

-Jeff :)

[Mike Henderson]

Interesting, I thought I just saw something in the news that UPS is adopting this policy.

-Jeff :)
UPS is union. It's hard to believe the union would agree to such a contract change.

Mike

[JohnT Fitzgerald]

Wow, I've not heard of that before. My company offers not only to employees and family, but also "domestic partners". There are different rates for individual, ind+1 (such as a couple), and "family" (someone with kids). As far as legal....check the laws in your area but I don't know if I've ever heard of a company being required to extend benefits to anyone past the employee.

[Dave Lehnert]

As far as the law goes I would THINK that a company could offer any package they wanted to just as long it was fair across the broad.
Now if they were to offer one employee one thing and something else to another then there would be a problem.
Correct me if I'm wrong but your employer does not have to offer insurance at all if they chose to???????

[Montgomery Scott]

My company does not pay for medical or dental plans for its temporary employees like myself. The employee may pay full cost for these plans which are offered through the company so we do get the benefit of the group discount. People who do not want insurance or who want an HSA, as many do, do not have to participate. I pay about $13k for medical / dental a year which is about average for a good plan.

I rather like this option as it gives the most flexibility for the employee and their family.

[Ken Fitzgerald]

California has some really different laws when it comes to employee benefits etc. but in most states I have never heard that an employer has to offer any benefits other than pay for labor.

I work for a really large corporation. While parts of the complany are unionized, some of it isn't and where I work isn't. We are provided health and dental insurance but of course, we have to pay our portion of it. Recently the deductibles increased dramatically from their historical levels.

[Joe Mioux]

Being a small business owner, I have to pay for my family's health insurance out of pocket.

A $2500 deductible and $5000 insurance premiums is my plan.

I wish all people had to pay for their own health insurance, it would force shopping around for the best medical value. Ex: when we had a last kid back in 2000, two hospitals were $1500 different in their respective ob costs. We chose the cheaper of the two hospitals. My wife doesn't do epiderals, but the hosp brought it into the room and they charged us. Anna called the hospital and said she didn't use it so take it off the bill. Had we had baby insurance, we would not have checked how to save money.

also, her Dr, reduced his fee by $1800 if we prepayed him for his services. we saved over $4000 by paying cash and being diligent and reviewing the itemized expenses.

if the above statement sounds too political, mods, please remove. I was attempting to interject economics into this thread.

joe

[Mike Henderson]

You make some good points, Joe. I've thought a lot about whether the "market" could be used to reduce the cost of medical care. There are places where it will work but there are places where it's difficult.

The first requirement is that the consumer needs to be paying for the services. But medical costs can blow up so fast when you have an accident or a serious illness - that's why we buy insurance. So maybe insurance should only cut in after the consumer pays some initial costs.

The second requirement is that the price for services have to be available to the consumers. For some things, like a CT scan, that's easy. But some services are so esoteric that the consumer would not understand what to even look for.

And then the issue of whether the consumer has time to shop. If you have an accident, you need treatment. You can't take the time to determine what services you need and shop those at different emergency rooms. Or you're diagnosed with a serious illness and need surgery. Same problem.

I just don't know if market mechanisms can be fully applied to medical care. They'll work in some cases but not all.

Mike

[Rod Sheridan]

Being a small business owner, I have to pay for my family's health insurance out of pocket.

A $2500 deductible and $5000 insurance premiums is my plan.

I wish all people had to pay for their own health insurance, it would force shopping around for the best medical value. Ex: when we had a last kid back in 2000, two hospitals were $1500 different in their respective ob costs. We chose the cheaper of the two hospitals. My wife doesn't do epiderals, but the hosp brought it into the room and they charged us. Anna called the hospital and said she didn't use it so take it off the bill. Had we had baby insurance, we would not have checked how to save money.

also, her Dr, reduced his fee by $1800 if we prepayed him for his services. we saved over $4000 by paying cash and being diligent and reviewing the itemized expenses.

if the above statement sounds too political, mods, please remove. I was attempting to interject economics into this thread.

joe

Thanks for the information, as a Canadian I'm always on the learning end of the equation regarding health care in the US.

Regards, Rod.

[Greg Peterson]

My brother works for a large, international shipping company. He recently injured himself, off the job, however it was a re-injury of an on the job injury several years ago (lower back). His job is very physical and his injuries are common in the environment there.

He will be unable to work for a while until his back is 100% (as per managements orders). In order to receive his medical benefits he must work a minimum of 80 hours per month. Being a full time employee and having over twelve years at the same job, this has never been a problem.

But now that he is on company disability (they paid him all of his sick time up front in one lump sum - that's the companies idea of disability pay), and he can't work for who knows how long, he will be losing his medical insurance until he can come back to work and put in 80 hours in a month. Of course his wife was unable to join the plan in the first place so she isn't affected.

Now that he really needs the coverage, he is without. No income, no medical coverage. Good luck picking up a private plan that won't exclude his existing condition. Good luck being able to afford any plan with no income.

It is a relatively rare exception when one can shop for medical care. But I suppose we can have EMT's carry a price list with them and let the patient choose which hospital and services they want. Or in my brothers case, he can shop around and see which doctors and physical therapists will allow him to make payments. That ought to be easy enough.

Yeah, health insurance, what a wonderful business.

[Paul Ryan]

UPS is union. It's hard to believe the union would agree to such a contract change.

Mike

That is quite common practice around here for employers to only cover parts of the employees insurance then the employee is responsible for the rest of their coverage along with the entire amount for the rest of their family. My wife is a full time union nurse and we pay a huge amount every month that goes for our family heath care. It increases every year and everytime they sign a new contract. It would be a happy happy day around here if they paid for 100% of heath care for family.

[Mike Henderson]

That is quite common practice around here for employers to only cover parts of the employees insurance then the employee is responsible for the rest of their coverage along with the entire amount for the rest of their family. My wife is a full time union nurse and we pay a huge amount every month that goes for our family heath care. It increases every year and everytime they sign a new contract. It would be a happy happy day around here if they paid for 100% of heath care for family.
What I was trying to say was that health care is a contract issue. The company can't make changes to the coverage unless they negotiate a contract change, and the union is unlikely to agree to that change in the middle of a contract period especially with a company making money.

As you point out, however, when the contract comes up for renewal, everything is on the table, including health care coverage.

Mike

[Joe Mioux]

You make some good points, Joe. I've thought a lot about whether the "market" could be used to reduce the cost of medical care. There are places where it will work but there are places where it's difficult.

The first requirement is that the consumer needs to be paying for the services. But medical costs can blow up so fast when you have an accident or a serious illness - that's why we buy insurance. So maybe insurance should only cut in after the consumer pays some initial costs.

The second requirement is that the price for services have to be available to the consumers. For some things, like a CT scan, that's easy. But some services are so esoteric that the consumer would not understand what to even look for.

And then the issue of whether the consumer has time to shop. If you have an accident, you need treatment. You can't take the time to determine what services you need and shop those at different emergency rooms. Or you're diagnosed with a serious illness and need surgery. Same problem.

I just don't know if market mechanisms can be fully applied to medical care. They'll work in some cases but not all.

Mike


thanks Mike,

re: bold type. This is how small businesses must operate. We have insurance for the big ticket health expenses, but pay out of pocket for the small everyday medical maladies.

Also, I have had a Medical Savings Account for years. I don't use that money for every day medical expenses. It is in a bank account if I need it for a family medical emergency.

I really need to bump it up to around $10K, currently it is around $7k

there are ways around and ways to negotiate reduced medical expenses - sometimes. Other times, no,

[Greg Peterson]

UPS is union. It's hard to believe the union would agree to such a contract change.

Mike

UPS union isn't all it's cracked up to be these days.

[Frank Hagan]

He will be unable to work for a while until his back is 100% (as per managements orders). In order to receive his medical benefits he must work a minimum of 80 hours per month. Being a full time employee and having over twelve years at the same job, this has never been a problem.


If he is in the US he is eligible for COBRA at no more than 102% of the cost of his prior health plan. The problem with this is that he's not working, and as a union member his health insurance cost is likely to be $13,000+ per year. But, continuing the COBRA coverage may help him avoid running into a "pre-existing condition" exclusion when he does go back to work.

[Butch Edwards]

my wife and I pay about $7200 in premiums a year... our deductables are at $3200 out of pocket,meaning, we lay out over 10 thousand dollars a year before the 80/20 ratio kicks in. personally, I'd been better off over the past 30 or so years, to put that premium $$ in a seperate account @ my bank, and paid what medical bills we had from there... I guarantee I'd be money ahead. her insurance is raising the premiums AND the deductable next year, and my ins thru the Gov't has been reducing covereage over the past few years. we're told which Drs we can see IF we want our insuranace companies to pay anything... that goes for labs/ dentists/etc....I realizt that the insurance companies are being raped by lawsuits, the non-covered insured being served at medical facilities(they DO pass the cost along), etc... but it's getting to the point where medical treatment outside of emergencies, is becoming a luxury, not a basic affordable benefit.

[Doug Mason]

I have read some articles that predict that in 10-15 yrs, health insurance provided by employers will be a thing of the past--just as happened with pensions. We are in a global economy--and our employer-paid-health policy is a competitive disadvantage for US companies. Remember, in the US system, capital flows to where the means of production is cheapest (globally)--and most foreign governments provide health insurance (via taxes).

I agree w/this assesment--that employers will drop such insurance. I think it will happen sooner than later. In the big picture, for the 40% of the highly skilled in the US population, it won't matter; but for the other 60% (those less-skilled who are competeing for wages with workers in other countries), the cost will be transfered (directly/indirectly) to the government (and paid by taxes).

[Jeffrey Makiel]

I wish all people had to pay for their own health insurance...

Group plans are definately the enemy of independent plans. Not only do independent plans cost significantly more, the claims are also challenged more.

In New Jersey, 65% of the plans are independent. This is a big issue. And, there are only a couple of providers of independent plans.

IMHO, there is no free market for insurance consumers. And, there is no free market for patients.

-Jeff :)