Medical/Dental Benefit Changes for LTD recepients

I've noticed the many responses to acquiring the Benefit SPD and then in finer print the Plan. The latter is much more informative while the Summary is just that - summary and seldomly touches upon all the "adjustments" that can be made to LTD payments.

Recently, a services company in Mass., decided to charge their LTD "inactive" employees for the premiums for medical/dental coverage at the same rate their "active" employees pay. Prior to this, the benefit Plan for years provided in cases of LTD that these premiums would be waived.

However, the conditions available to "active" employees such as FSA, Pre-Tax dollars and Selection Changes in case of life changing events are not available to the "inactive" employees. Said another way, if an LTD recepient changes their selection (e.g. from Family to Empl + they cannot go back to Family).

Their legal counsel, as a shot across the bow, indicated in no uncertain terms that these LTD recepients can be terminated on a 'moments' notice but by the "kindness" of heart have been kept as an employee. There is no argument that they have done the honorable for people on LTD. Paying 1/3 of costs is still better than full costs ala Cobra .

However "inactive" eimployees are noway near receiving the compensation they once received, nor bonuses or raises while LTD benefits are typically in the 21%-40% (not 60% as the summary suggests) of original compensation. But now they are being "forced" to pay at active employee rates.

Nonethelss, since some people made additional insurance plans based on the benefit provided offerings that have significantly changed and in lieu of the restrictions (& threats of termination) are they Discriminating against a Class of People by doing this?

1 answer  |  asked Feb 11, 2009 04:05 AM [EST]  |  applies to Massachusetts

Answers (1)

Judith Miller
insurance payment

The employer is correct here. Assuming that the employer has more than 50 employees and is subject to the Family and Medical Leave Act, after the employee has been out of work for 12 weeks, the employer can terminate the employee and the employee will have to pay 100% of insurance premiums via COBRA. (If they have fewer than 50 employees, they do not have to hold the job open for even 12 weeks.) Thus, paying 1/3 of the insurance premium is far more than they are required to do.

posted by Judith Miller  |  Feb 11, 2009 05:19 AM [EST]

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