Does an employer have to offer medical benefits to ALL employees or can they discontinue benefits for some?

Question

The company I'm working for is discontinuing benefits for production agents (call center environment). I hear that floor support will be able to keep their benefits, but they are also production employees. They are not Staff or mgt. Can this be done?

Answer 1

*Definitely, many businesses offer more benefits to management then they do the regular staff. It is a fringe benefit and therefore not regulated, as they do not have to offer any in the first place. You must decide whether you want to work for a company that decides to stop caring for it’s employees or not as benefits may play a large role in your life. Medical insurance is important in a family and a lower paying job with good benefits may yield more money in your pocket than paying for your own insurance or going without.*

Answer 2

Hi! I'm sorry that this is happening to you because I know how difficult it is to go without insurance for myself and my family (I'm in that situation right now),

But before I returned to school, I've been a benefits administrator and just looked at everyone's replies and would like to clarify some of the information listed in the other responses.

Ultimately in answer to your question. A company does not have to offer medical benefits to all employees. And yes, it can cover the production employees but not the call center employees because they are classified differently. It is most likely a cost cutting measure because the costs are too expensive for the company to maintain. Since the production employees are still being covered, do they have an employment contract such as a union contract? If so, they are under a separate insurance plan since that is negotiated between the union and the company separate from non-union employees.

What you need to do is get a copy of the Summary Plan Description from your benefits administrator. It's like the auto insurance contract and specifies who in the company is eligible for coverage under the insurance plan and the specifics of the plan coverage. By "Who" I don't mean the names, but which positions will be covered, and how many hours per week they have to be employed.

The main reason why insurance coverage is being dropped by so many employers is the cost. If you have ever seen COBRA rates, that shows what the employer pays each month for an employee, plus a 2% administration fee (it's the exact insurance people had while employed as COBRA is just the act that regulates continuing the coverages). Multiply that amount on the COBRA letters by the number of employees in the company and you can get a pretty good idea of just how much it can cost the company to continue medical benefits for their employees. But what I don't understand is why your company did not change the requirements to allowing coverage at a higher employee contribution rate.

But I would suggest that you might also check with your benefits adminsitrator to see if they could offer either a HSA or MSA. I've been out of the loop for a while in benefits, so I get these two confused. But these spending accounts allow an employee or an employer to put money into the account each week and draw money out for various medical expenses - they often will combine them with a higher deductible insurance policy. That can allow an employee the option to continue medical coverage, and the employer can choose the amount they contribute towards each account. But the employee also can put money into the account as well on a pre-tax basis.

Good luck to you!

Answer 3

My personal experience is: I signed an agreement on the last page of the Employee Benefits and Rules handbook, along with the manager of Human Resources. A year later, I was informed I would no longer get sick pay. A couple of months after that incident, I was laid off when I put in for my 2 weeks vacation, as per the definition described in the Employee Handbook.

I learned, an Employee Handbook just describes available benefits. It is not a contract. There is no laws enforcing such a written description. I went to the State Employment office. The only right we have is to work or not work for an employer. The employer can change whatever compensation, whatever benefits they feel fit.

It is your choice to work if the employer tells you there will be a cut in your pay after the next paycheck.

Discrimination laws are federal and they apply to enterprises with 50 or more employees, or if the company is involved with any federal contracts.

Answer 4

Employers don`t have to offer medical benefits ,but most have some employee coverage ,to attract long term employees.
It is in the best interest to offer health care to its employees so that they can remain healthy and cared for while employed .What good is a worker who gets sick and can`t come to work.
If a worker developes a medical condition and need doctors care to controll it ,they will still be able to work.
Employers also get to write the costs off on their corporate taxes.
Your company is probably dropping the call center benefits so that they will have a revolving door of temporary part time ,no benefit workers.
Its the American way . Screw the people who actually do the work and give the extra pay to the "idea men "

Answer 5

But I would suggest that you might also check with your benefits adminsitrator to see if they could offer either a HSA or MSA. I've been out of the loop for a while in benefits, so I get these two confused. But these spending accounts allow an employee or an employer to put money into the account each week and draw money out for various medical expenses - they often will combine them with a higher deductible insurance policy. That can allow an employee the option to continue medical coverage, and the employer can choose the amount they contribute towards each account. But the employee also can put money into the account as well on a pre-tax basis.

Answer 6

It is a legal maneuver for companies to discontinue benefits, however it is illegal for them to discontinue it for one person, unless that person is not working the scheduled hours they have been assigned. Most of the time companies will cancel entire departments benefits as a means to an ends. When they do this they are making life tougher on the employee in the hopes that the employee will leave their job to find another one. They feel it is a win win situation as they are not firing employees, employees are still getting paid, but tthe company does not have to invest into the employee, their health, their safety, or the welfare of their families. Canceling a whole group is usually a sign that they are getting ready to nix the entire group of people for some reason or other.
In all honesty, Iwould hold onto the job and start looking for a new job as soon as possible. Holding on to the job allows you to look for a new position, still pay your bills, and you would still be able to keep your credit score clean because you are paying your bills. Start this process soon because if they are cutting benefits, they may cut everything, sick time, vacation, personal time, all of it. Legally companies have to pay out your time if they cut in areas, but they do not have to let you acrue any more time then what you have.

Answer 7

If the employee is part-time, the employer is not required to offer any health benefits to the employee. You may want to do some research on whether this is legal to discontinue health benefits for full time employees.

Call center employees have no risk of getting hurt, because they're just sitting in the office and answering phones. Floor support employees can get hurt anytime of the day. I believe your employer is trying to cut cost by discontinuing health benefits to certain employees.

Answer 8

The government offers tax benefits eg. deductions or tax exemptions , to businesses that offer health benefits to their employees. With this tax break carrot in mind, most employees go that direction.
Unfortunately, it is not a legal requirement. If they are a startup company, and the benefits are cutting into their overhead, they can cut some of the benefits. WHen they prosper a bit more, they will reinstate it, it depends. The more successful and prosperous a company is, the more benefits their employees get.

Answer 9

Unless the employess have contracts specifying any such obligations, they can choose to insure whomever they want.

If an employer wanted to, he could enter the production floor and state something like, "All left-handed employees on the right side of the room will get free candy at lunch time. Everyone else will not."

Unless there are other, legally binding obligations, such as anti discrimination laws, the boss can do much as he likes.

Here's another, realistic example: Some large organizations have seveal categories of workers. Some are union. Some are not. There is more than one union. Some are managers. Some are independant contractors. Some are sub contractors. Some are interns, some are consultants. Each of those categories have different pay scales, benefits, obligations and protections.

This is not illegal discrimination. (no matter what "martinamagrace" says.) Only certain kinds of discrimination are illegal, such as race, relgion, gender, etc.

Answer 10

As far as I know, companies are able to discontinue/offer benefits to whomever they wish. Some companies only offer it to full-time workers, while some offer it to part-time also. Usually anyone who signs up for benefits signs an agreement. The "fine print" usually always states that benefits eligibility can be revoked at any time, with or without notice. Since it's a signed agreement, that means you are okay with that. Most companies revoke benefits to certain employees either to cut down on the number of claims, and of course, to save money. Especially with the end of the year fast approaching, they're probably trying to cut spending so they meet their budget for 2006. Hope this helps!