Is it Legal to Give Different Medical Insurance to Employees?

Employers can offer different levels of coverage to employees.
Employers can offer different levels of coverage to employees. (Image: Jupiterimages/Comstock/Getty Images)

Employers offering health insurance are not legally bound to offer the same benefits to all employees. Under the law, an employer cannot engage in discrimination, but that does not mean the employer has to give everyone in his employ the same benefits. While he cannot only give health insurance to his male workers, he can give his management workers better health benefits than his hourly workers.

State Regulations

In some states, such as Massachusetts, employers using insurance companies in the state must follow state regulations. For example, if an employer buys into health plan that is fully insured, the employer has to let every employee that is eligible to participate in any plan the company has available. However, if the employee chooses an expensive health plan, the employer does not have to provide an additional percentage in order to give benefits to the employee. An employee can choose a “deluxe” plan, but if the premiums are more costly than a more basic plan, the employee pays the additional costs.

Contribution Level

Contribution levels from a company can differ between full-time employees and part-time workers. For example, some companies offer to pay a higher percentage of the premium for full-time workers, while offering to contribute a lesser amount for part-time workers. In addition, some companies offer health care coverage continuation as part of a severance package, paying into health care plans for a certain period of time when an employee is no longer considered an employee.

Medical Needs

Different groups of employees have different medical needs, which should be factored in when looking for the right insurance benefits. A company that has young workers might want to find an insurance company offering coverage for employees who become pregnant. On the other hand, older workers might have their own needs to consider when shopping around for health insurance.

Employer Rights

Employers need to know their rights when it comes to offering health care to employees. For example, in many cases, some health plans require the employer to provide equal care for all eligible employees. On the other hand, some plans offered by small employers do allow for restrictions on any existing conditions employees have. In most cases, a period between six months to one year must pass before the coverage covers the existing condition.

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