declining employer benefits?

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28fe6
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declining employer benefits?

Post by 28fe6 »

Is it common or possible to decline employer health benefits? If you do, do you normally get any rebate of what the employer would otherwise contribute to your premiums?

I'm sure dual-earning households do this all the time based on whose job has the better insurance. I have never been a dual-earning household, so I don't know how it typically works.

I am looking at a new employer. There is only one plan available; its insurance coverage is good, but my share of the premiums is much higher than I am used to, and no HDHP is offered. I really prefer my lower premiums of my HDHP and tax benefits of the HSA. In theory I could decline the benefits, and get my own HDHP. I have always heard that buying insurance on the open market is cost-prohibitive, but if the employer would refund me what they normally contribute towards their Cadillac plan, it would seem to make up some of the difference.
student
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Re: declining employer benefits?

Post by student »

I have not heard of anyone not able to decline benefits. However, most places will only give you a small amount for not taking the benefits.
Last edited by student on Sat Dec 01, 2018 8:54 am, edited 1 time in total.
randomguy
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Re: declining employer benefits?

Post by randomguy »

You need to talk to the HR department as it is plan specific. It should be pointed out that the tax treatment can eat up a lot of potential savings (paying 7k post tax might be the same as paying 10k pretax).
SimonJester
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Re: declining employer benefits?

Post by SimonJester »

At my wife's last three employers and her current one, you can decline but you get nothing. My current employer you can also decline everything and again you get no additional money.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
tim1999
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Re: declining employer benefits?

Post by tim1999 »

A former employer of mine would give you like $200/month if you declined their health insurance and showed proof of coverage elsewhere, but did away with the "rebate" around the time that Obamacare came out.
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mmmodem
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Re: declining employer benefits?

Post by mmmodem »

I have not encountered an employer that pays for declining health insurance. However, my current employer does allow us to decline life insurance for cash which is great as I can get more term life insurance coverage per dollar on my own.
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Watty
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Re: declining employer benefits?

Post by Watty »

One thing to watch out for is that if you are planning on getting insurance through your spouse's work you may not be able to do that. Some employers will not allow a spouse to get insurance if they are eligible for health insurance through their employer.
Turbo29
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Re: declining employer benefits?

Post by Turbo29 »

tim1999 wrote: Sat Dec 01, 2018 11:23 am A former employer of mine would give you like $200/month if you declined their health insurance and showed proof of coverage elsewhere, but did away with the "rebate" around the time that Obamacare came out.
Same with my employer. They rebated money to employees who declined health insurance and showed proof of insurance elsewhere. They stopped the rebate when ACA took effect.
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whodidntante
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Re: declining employer benefits?

Post by whodidntante »

mmmodem wrote: Sat Dec 01, 2018 11:27 am I have not encountered an employer that pays for declining health insurance. However, my current employer does allow us to decline life insurance for cash which is great as I can get more term life insurance coverage per dollar on my own.
That's good. I'm always dubious on employer provided disability insurance and life insurance. If the need for the insurance is triggered by a gradual decline instead of an "event," you'll probably get canned before any benefit from the insurance can be realized.
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dm200
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Re: declining employer benefits?

Post by dm200 »

student wrote: Sat Dec 01, 2018 8:47 am I have not heard of anyone not able to decline benefits. However, most places will only give you a small amount for not taking the benefits.
Some employers offer a benefits "cafeteria" plan - selecting or declining certain benefits - with a degree of financial benefits.
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ClevrChico
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Re: declining employer benefits?

Post by ClevrChico »

It's certainly possible. We had 100% paid healthcare, and an employee declined it for "moral reasons". :shock: They received no extra cash or compensation.
crswvc
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Re: declining employee benifits

Post by crswvc »

student wrote: Sat Dec 01, 2018 8:47 am I have not heard of anyone not able to decline benefits. However, most places will only give you a small amount for not taking the benefits.
I once worked at a small company with less then 20 employees and they required everyone to accept the health insurance as condition of employment.
Something about the insurance company wanting more people in the pool.
On the plus side the company did pay 100% of the premium for employees.
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28fe6
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Re: declining employer benefits?

Post by 28fe6 »

Well I'm probably just stuck keeping their standard offering even though the premiums are $3000/year more and losing the HSA reduces my tax advantaged space by $7000/year. I figure that sets me back $3000-$4000 per year in the overall scheme. We had verbally agreed on a salary, but I think I will have to ask them for a higher salary or more signing bonus now. Or I could just swallow it on the theory that I should be getting better insurance for that money, albeit insurance I wouldn't opt for. I wonder if they are used to people trying to negotiate more money because the benefits are "too good".
delamer
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Re: declining employer benefits?

Post by delamer »

28fe6 wrote: Sat Dec 01, 2018 1:08 pm Well I'm probably just stuck keeping their standard offering even though the premiums are $3000/year more and losing the HSA reduces my tax advantaged space by $7000/year. I figure that sets me back $3000-$4000 per year in the overall scheme. We had verbally agreed on a salary, but I think I will have to ask them for a higher salary or more signing bonus now. Or I could just swallow it on the theory that I should be getting better insurance for that money, albeit insurance I wouldn't opt for. I wonder if they are used to people trying to negotiate more money because the benefits are "too good".
I’d approach it just as the insurance is more costly for you in your negotiations. Your new employer doesn’t need to know it is better coverage.

We receive compensation from my husband’s employer because we get our insurance through my job. However, the compensation is only about 10% of what his employer is actually saving.
megabad
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Re: declining employer benefits?

Post by megabad »

28fe6 wrote: Sat Dec 01, 2018 1:08 pm Well I'm probably just stuck keeping their standard offering even though the premiums are $3000/year more and losing the HSA reduces my tax advantaged space by $7000/year. I figure that sets me back $3000-$4000 per year in the overall scheme. We had verbally agreed on a salary, but I think I will have to ask them for a higher salary or more signing bonus now. Or I could just swallow it on the theory that I should be getting better insurance for that money, albeit insurance I wouldn't opt for. I wonder if they are used to people trying to negotiate more money because the benefits are "too good".
My goodness. $3000 more per year? For a single individual? In the same region? I would definitely renogotiate a little myself. At that increase, it is likely you can get coverage in the market and come out ahead with an HSA. An unexpected pay cut in year 1 is not kosher in my book and this increase is outside the realm of reasonable to me for a single person. They may or may not play ball, so you will have to decide what the job is worth for you. Really makes me feel that perhaps employers should not be involved in your health care at all and that way everyone would be on a level playing field, but that is a separate topic.
barreg
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Re: declining employer benefits?

Post by barreg »

tim1999 wrote: Sat Dec 01, 2018 11:23 am A former employer of mine would give you like $200/month if you declined their health insurance and showed proof of coverage elsewhere, but did away with the "rebate" around the time that Obamacare came out.
Similarly, my employer would give any employee that declined healthcare benefits $1,000, but that also went away when the ACA came out.
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yangtui
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Re: declining employer benefits?

Post by yangtui »

I have always been able to decline benefits but never seen/heard of an employer offering money in lieu of taking them. You should check with HR and colleagues though.
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28fe6
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Re: declining employer benefits?

Post by 28fe6 »

megabad wrote: Sat Dec 01, 2018 4:27 pm
28fe6 wrote: Sat Dec 01, 2018 1:08 pm Well I'm probably just stuck keeping their standard offering even though the premiums are $3000/year more and losing the HSA reduces my tax advantaged space by $7000/year. I figure that sets me back $3000-$4000 per year in the overall scheme. We had verbally agreed on a salary, but I think I will have to ask them for a higher salary or more signing bonus now. Or I could just swallow it on the theory that I should be getting better insurance for that money, albeit insurance I wouldn't opt for. I wonder if they are used to people trying to negotiate more money because the benefits are "too good".
My goodness. $3000 more per year? For a single individual? In the same region? I would definitely renogotiate a little myself. At that increase, it is likely you can get coverage in the market and come out ahead with an HSA. An unexpected pay cut in year 1 is not kosher in my book and this increase is outside the realm of reasonable to me for a single person. They may or may not play ball, so you will have to decide what the job is worth for you. Really makes me feel that perhaps employers should not be involved in your health care at all and that way everyone would be on a level playing field, but that is a separate topic.
My current premiums are $93 per check, with $1000 HSA contribution. New premiums will be $178 per check, naturally no HSA contribution since no HSA. That's a difference of $1950 just for the premiums or $2950 with the $1000 contribution counted. Not to mention the tax benefit.
Spirit Rider
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Re: declining employer benefits?

Post by Spirit Rider »

Obamacare subjects a company to a $100/day/employee penalty for reimbursing an employee purchased healthcare plan.

Starting in 2017 an exception was added that allows a company that does not offer a group health plan and has < 50 employees to offer a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) to reimburse employees for plan premiums and qualified medical expenses.

The latter clearly doesn't apply to the OP's employer and they would be subject to the $100/day/employee penalty if they gave the employee anything for declining the employer's health insurance plan.
delamer
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Re: declining employer benefits?

Post by delamer »

Spirit Rider wrote: Sat Dec 01, 2018 7:36 pm Obamacare subjects a company to a $100/day/employee penalty for reimbursing an employee purchased healthcare plan.

Starting in 2017 an exception was added that allows a company that does not offer a group health plan and has < 50 employees to offer a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) to reimburse employees for plan premiums and qualified medical expenses.

The latter clearly doesn't apply to the OP's employer and they would be subject to the $100/day/employee penalty if they gave the employee anything for declining the employer's health insurance plan.
Do you have a citation for this?

I very much doubt my husband’s employer is paying over $35,000 on order to compensate him a couple thousand dollars for declining their health plan.
Katietsu
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Re: declining employer benefits?

Post by Katietsu »

delamer wrote: Sun Dec 02, 2018 10:50 am
Spirit Rider wrote: Sat Dec 01, 2018 7:36 pm Obamacare subjects a company to a $100/day/employee penalty for reimbursing an employee purchased healthcare plan.

Starting in 2017 an exception was added that allows a company that does not offer a group health plan and has < 50 employees to offer a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) to reimburse employees for plan premiums and qualified medical expenses.

The latter clearly doesn't apply to the OP's employer and they would be subject to the $100/day/employee penalty if they gave the employee anything for declining the employer's health insurance plan.
Do you have a citation for this?

I very much doubt my husband’s employer is paying over $35,000 on order to compensate him a couple thousand dollars for declining their health plan.
I am not an expert on this but here is an article that appears to explain the details well.
https://www.google.com/amp/s/www.bizjou ... s.amp.html
bob60014
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Re: declining employer benefits?

Post by bob60014 »

As it was part of the compensation package, my former employer allowed opt out of health insurance and paid $3500 to me. My wife had a better plan so it was a no brainer.
delamer
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Re: declining employer benefits?

Post by delamer »

Katietsu wrote: Sun Dec 02, 2018 11:05 am
delamer wrote: Sun Dec 02, 2018 10:50 am
Spirit Rider wrote: Sat Dec 01, 2018 7:36 pm Obamacare subjects a company to a $100/day/employee penalty for reimbursing an employee purchased healthcare plan.

Starting in 2017 an exception was added that allows a company that does not offer a group health plan and has < 50 employees to offer a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) to reimburse employees for plan premiums and qualified medical expenses.

The latter clearly doesn't apply to the OP's employer and they would be subject to the $100/day/employee penalty if they gave the employee anything for declining the employer's health insurance plan.
Do you have a citation for this?

I very much doubt my husband’s employer is paying over $35,000 on order to compensate him a couple thousand dollars for declining their health plan.
I am not an expert on this but here is an article that appears to explain the details well.
https://www.google.com/amp/s/www.bizjou ... s.amp.html
Thanks.
Cop51
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Re: declining employer benefits?

Post by Cop51 »

We get 25% of the premium cost up to $5000 for declining the healthcare/Rx/dental.
Thegame14
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Re: declining employer benefits?

Post by Thegame14 »

I have lobbied past employers to do this and they all say no. It makes no sense, if I takes wife's health insurance, I save them money, so they should share some of that savings with me as an inventive for dual working families to choose the other spouses insurance. Not once have they agreed to it even if they understand it saves them money, mostly their excuse is what if I need the insurance in the future and of course I say then you take back whatever amount you give me per year for not taking the insurance. But I also thought the same, if I save the company $10,000 a year on insurance, why shouldn't I get a higher salary of $5K for each year I decline their insurance?

Current boss loves to say that I am second highest paid person in our department, but I don't take the company's health insurance which he says is very generous, but he always forgets that my total compensation doesn't include the insurance.
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8foot7
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Re: declining employer benefits?

Post by 8foot7 »

I think an old employer was willing to give us $1,000 to waive medical insurance. It was never a realistic option for me.
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rterickson
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Re: declining employer benefits?

Post by rterickson »

My wife's (government) employer pays her just under $50 a month for waiving their health insurance. Periodically they ask for evidence that she is covered by my employer plan.
wilshuer
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Re: declining employer benefits?

Post by wilshuer »

In the past my wife worked as an RN as PRN at various hospitals, first question she’d always ask after getting a offer was if the hourly rate was higher if she’d forgo benefits being available - she’d typically end up with an additional $4-5/hr. At the time my employer didn’t have a surcharge for spousal coverage so worked out well for us.
HEDGEFUNDIE
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Re: declining employer benefits?

Post by HEDGEFUNDIE »

Thegame14 wrote: Mon Dec 03, 2018 9:25 am I have lobbied past employers to do this and they all say no. It makes no sense, if I takes wife's health insurance, I save them money, so they should share some of that savings with me as an inventive for dual working families to choose the other spouses insurance. Not once have they agreed to it even if they understand it saves them money, mostly their excuse is what if I need the insurance in the future and of course I say then you take back whatever amount you give me per year for not taking the insurance. But I also thought the same, if I save the company $10,000 a year on insurance, why shouldn't I get a higher salary of $5K for each year I decline their insurance?

Current boss loves to say that I am second highest paid person in our department, but I don't take the company's health insurance which he says is very generous, but he always forgets that my total compensation doesn't include the insurance.
If you are a low health insurance user you may not be saving them any money by opting out of their plan. In fact you may be costing them money because you’re not paying into the pool.
texasdiver
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Re: declining employer benefits?

Post by texasdiver »

I have been declining employer-provided insurance from my school districts (I'm a teacher) for the past 15 years because I'm married to a physician who gets better family coverage through her HMO employer.

The first district I worked at had a set amount of about $400 a month that was the district's contribution to your health coverage. You could use that towards any of their health plan options of which there were about 10 plan choices (they were administered state-wide in TX so lots of choices) or, alternatively, you could put some or all of your $400 monthly share into the district's FSA account until you hit the maximum. I went with this option and spent the money on kids braces. This was pre-Obamacare.

The second district I've worked for post-Obamacare has a similar set district contribution that you can use towards the purchase of any individual or family plan that they offered (about 5 choices). But if you decline your district contribution amount goes back into the pool and is used to reduce costs for everyone else by raising the subsequent year's district contribution. I always declined but I never had to show proof of other coverage to anyone in my HR.

As for other employee benefits? The pension plan was obligagory. All the other forms of benefits were elect-in voluntary (term life, 403(b) plan, etc.)
Damulag
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Re: declining employer benefits?

Post by Damulag »

Current employer used to give $500 a month for declining insurance but now nothing is offered. My wife and I have had separate policies which works out cheaper for us due to the $125 per month surcharge (on top of the premium) if she declines her employers insurance and wants to be on mine.

The premiums have never worked out cost wise for me to be on hers so separate it is.
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JoeRetire
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Re: declining employer benefits?

Post by JoeRetire »

28fe6 wrote: Sat Dec 01, 2018 8:40 am Is it common or possible to decline employer health benefits?
Extremely common in two-earner families to choose the "better" health benefits of one employer and decline the other. Happens all the time.
If you do, do you normally get any rebate of what the employer would otherwise contribute to your premiums?
No. Normally you do not.
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frequentT
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Re: declining employer benefits?

Post by frequentT »

Very common: Incentive payment to opt out depends on the employers cost to insurance, claims history, etc. I have heard of incentive payments of $500-$1000.
Topic Author
28fe6
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Re: declining employer benefits?

Post by 28fe6 »

This thread responses are very inconsistent. Some people say a refund is possible; others say the ACA imposes penalties for refunds. I guess I am not going to be declining benefits anyway, but which is it?
Spirit Rider
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Re: declining employer benefits?

Post by Spirit Rider »

28fe6 wrote: Thu Dec 06, 2018 11:11 am This thread responses are very inconsistent. Some people say a refund is possible; others say the ACA imposes penalties for refunds. I guess I am not going to be declining benefits anyway, but which is it?
Like all things having to do with the tax code, there are complicated rules.

The intent of the ACA penalties are to prevent an employer from reimbursing their employees for obtaining subsized health insurance from the marketplace. Otherwise, many companies would stop offering health insurance and reaping the benefits of subsidies intended for individuals.

So the devil is in the details.
lazydavid
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Re: declining employer benefits?

Post by lazydavid »

My employer does the exact opposite. If you elect for +1 or family coverage, you have to provide proof that either:
  • You have no spouse
  • Your spouse does not work
  • Your spouse's employer does not offer a group medical plan
Else you are subject to a surcharge, which I believe is $50 per pay period.
PVW
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Re: declining employer benefits?

Post by PVW »

Thegame14 wrote: Mon Dec 03, 2018 9:25 am I have lobbied past employers to do this and they all say no. It makes no sense, if I takes wife's health insurance, I save them money, so they should share some of that savings with me as an inventive for dual working families to choose the other spouses insurance. Not once have they agreed to it even if they understand it saves them money, mostly their excuse is what if I need the insurance in the future and of course I say then you take back whatever amount you give me per year for not taking the insurance. But I also thought the same, if I save the company $10,000 a year on insurance, why shouldn't I get a higher salary of $5K for each year I decline their insurance?

Current boss loves to say that I am second highest paid person in our department, but I don't take the company's health insurance which he says is very generous, but he always forgets that my total compensation doesn't include the insurance.
My company offers many benefits that I don't use; e.g., I don't require family health or life insurance, I don't use company adoption benefits, I haven't taken advantage of educational reimbursement, I didn't die on the job (yet). Probably others. They've never offered to share their savings.
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