Canan employerprofit from employee insurance premiums?
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Canan employerprofit from employee insurance premiums?
There is an annual increase from the insurance company for the group health plan. The insurer has cited an increase of approximately 37%. The company has blocked out the actual cost of the premium on the insurance form and is stating an increase of 83%. Is this legal?
Asked on November 14, 2010 under Employment Labor Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
It depends on the circumstances. The company could not tell you that the increase was 83% if they also represent that the increase in cost was all due to the insurer raising the premium, when in fact the insurer raised it only 37% and the company is pocketing the extra 46%. On the other hand, since companies do NOT need to provide health insurance, and if they do, they can have their employees pay more or less of the premium, the employer could legitimately decide that employees need to pay a larger share. The key is, they cannot lie or deceive the employees as to where the money is going, but if they want to charge employees more and subsidize them less, they can do that.
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