Post # 1
Hello! I have kind of a tricky question, that I hope you lovely bees can help me navigate.
I have health insurance through work – the total cost is $400 a month, but my employer pays 50%, so I pay $200 pre-tax each month.
When I get married this coming July, I plan on switching to FI’s insurance plan – it is much less expensive, and offers much more extensive coverage.
Heres where it gets tricky: When I make the switch, I will technically be “saving” my employer $200 a month, or $2400 a year. Is there a way I can ask my employer to put that same amount into a 401K or some other “benefit” area? Or will I just be giving my employer more money by leaving the plan?
Post # 3
You could always ask, but I highly doubt they’re going to do that. I think they just end up saving the extra money once you leave the plan.
Post # 4
@kariface: The amount that the employer is paying toward your insurance is considered a benefit and because it is a benefit, they have to legally offer that to all their employees. Using your scenario, the employer would then have to pay extra for all those people that do not take the insurance. How is that fair for those who do not have another option for insurance and have to get it through your employer?
Also, if you do not take the benefit, the employer is not obligated to compensate you.
So in other words, the employer saves money by not insuring you. You will not see that savings.
Post # 5
Some employers (like mine) give you a rebate for NOT going on their insurance plan but it’s never the same dollar cost that they are paying for your insurance. My employer contributes about $210/month towards my insurance (I pay $80) and if I were to go on DH’s plan, I’d get a $40/month rebate for that.
Employers get tax benefits for paying your benefits so you’re not really saving them $200/month if you’re not on their insurance; it’s hard to say exactly what the employer’s true cost is, because there are so many factors.
Anyway you can ask but be prepared to be told No, because unless this arrangement is already in place, it’s not likely that a HR department will set up a special system just for you. Also before you make the switch, find out what the taxable benefit to your DH would be, as he will need to pay taxes on the portion of YOUR insurance that his employer contributes. Usually this still ends up being more favorable to you in the long run, as the tax on $1000 worth of benefits (or whatever your portion of the insurance is tallied at) isn’t as expensive as the benefit itself would be if you were paying it, but if it pushes you into a higher tax bracket, then it could become very expensive. In some cases (like mine) we actually end up with more money in our pockets by continuing to maintain separate policies even though the cost of the insurance itself is cheaper to go on one policy, as that taxable contribution for DH’s insurance (if he were to go on mine) pushes me into the next higher tax bracket, and it’s a painful bracket there!
Also don’t be mad if you’re told No; like any other employee benefit, it’s up to you to choose to use it, and you don’t usually get to pick an alternate benefit. Like my company will cover part of the costs of a gym membership. We have a workout room at home and I don’t smoke so I wouldn’t expect my employer to pay me for my Nordic Trak.
Post # 6
@country chic: Thanks. It’s just a strange situation, as I am the first employee of a company, and I, for a time, was the only one getting insurance. It sounds like it’s something to bring up to my boss … but I just don’t see how its fair that I will not recieve any sort of “benefit”, especially since the benefit program was created for me. Waaaah! Being a grownup sucks.
Post # 7
It doesn’t hurt to ask. The worst they could do is say no. Also, maybe negotiate for a couple extra vacation days a year if they don’t intend to pay you $200 a month, maybe?
Post # 8
@fishbone: Great point on the tax stuff – I will totally keep that in mind when we sort through this.
The hardest part, that I see, is that I work at a start-up and we have made the rules as we go along. Luckily, my boss and I are great friends and I feel comfortable I can go to her and have a good talk about this, without worrying about coming off as bitchy or overly needy.
Post # 9
@kariface: I would ask for extra vacation! 🙂