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  1. #1
    Join Date
    Mar 2017
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    8

    Default Can Both Spouses be Charged Health Insurance Premiums if Working for Same Employer

    I'm not sure if this is the correct sub-forum. Here is the setup:

    - My spouse and I work at the same employer. I started there first so our health insurance has always been taken out of my paycheck.
    - My spouse later got a job there managing a Federal grant. Her paycheck comes out of that federal grant.
    - She remains on my health insurance plan (employee + spouse)

    Our health insurance premium is taken out of my paycheck (pretax), and of course, the employer pay another part of the premium on top of that (the amount I do not know). Theoretically, the amount the employer pays should not change according to my spouse's employment status.

    Here is the question:
    When my spouse became employed, the employer began taking her half of the employee cost of health insurance out of her federal grant, yet she remains on my employee + spouse plan. Is this legal?

    The view I have is that: the employer is deducting a benefits cost for one employee from a federal grant (out of which that employees paycheck comes, correctly) out of funds allocated to another employees benefit plan. My employment has nothing to do with this grant. Before my spouse was employed, and if she ceased employment, the employer could not justify taking her portion of insurance premiums out of my paycheck. Likewise, if I changed employers, my new employer couldn't take my spouse's portion of benefits cost out of the federal grant (that the hypothetical new employer wouldn't have access to anyways).

    Please let me know if any of this is unclear. I am not looking for legal advice, but just wanted to get some thoughts from others who may have a bit more insight into what the relevant legal issues/questions might be here.

    Cheers!
    And thanks in advance for any thoughts!

  2. #2
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Federal Grant, Spousal Benefits

    Has the amount that is taken from your paycheck changed?

  3. #3
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    Thanks for the question cbg. No, nothing I see in my paycheck has changed. I have no idea how much the employer pays additionally for insurance.

    I'll give some hypothetical numbers to try an illustrate the situation:

    Year 1:
    Jim is employed by B corp; his wife Jill is unemployed.
    Both Jim and Jill are covered on Jim's employer health insurance plan.
    Jim's paycheck has $300 taken out of it for his portion of employee+spouse health insurance plan.
    B corp pays an additional $800 for the employee+spouse health insurance plan.
    So the total cost for the health insurance is $300+$800=$1,100.

    Year 2:
    Jim is still employed by B corp.
    His wife Jill gets a job with B corp managing a federal grant.
    Jill's salary is paid out of the grant.
    Her health insurance would be paid for out of the grant if she chose a plan, however, she stays on her husband's plan.
    Jim's paycheck still has $300 taken out of it for his portion of employee+spouse health insurance plan.
    Jill's paycheck has nothing taken out of it for health insurance.
    B corp still pays an additional $800 for the employee+spouse health insurance plan.
    So the total cost for the health insurance is still $300+$800=$1,100.
    However, B corp reimburses itself from the federal grant for $400, the half of the employer cost of employee+spouse plan relevant to Jill.

    There are several issues/questions I can see here:
    1) This could cause grant management problems unless Jill was informed of the amount taken out on her behalf ($400) - she is completely responsible for grant accounting. She was not informed of this.
    2) It seems that the crux of the matter is that the employer is claiming that they have a right to allocate grant funds to a certain purpose due to the way another employee (who is not involved with the management of the grant) filled out his insurance paperwork.
    3) Does the employer have a right to spousal identity? What if I didn't want my employer to know the identity of my spouse for whatever reason. How would they know we were married so as to take that $400 out of the grant? Seems like there might be privacy issues involved.
    4) Why would the federal government allow such an exception? It seems like they would likely rather prevent such use of grant funds whenever possible. (Of course it is possible that such a law exists allowing an employer to do this.)

    Sorry for the text overload, just seems necessary to make sense of the situation.

    Thanks for any thoughts!

  4. #4
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Federal Grant, Spousal Benefits

    I know absolutely nothing about grant accounting. However, I know a great deal about employer sponsored employee deduction. Nothing you have posted with regards to the deductions from your paycheck is in any way illegal. However, you'll have to wait for someone else to discuss the grant deduction. Sorry.

  5. #5
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    Thanks for the comment, cbg. It is still helpful.

    Yes, the question is about whether or not the employer is justified in taken a certain sum of money out of the federal grant.

    I didn't know if there was a better sub-forum here, so maybe a moderator can make a suggestion if there is.

  6. #6
    Join Date
    Jun 2006
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    Massachusetts
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    24,521

    Default Re: Federal Grant, Spousal Benefits

    I do know this much - it's going to depend on the terms of the grant. I work for the Benefits office of a major university. We have employees who are paid by grant, and in some cases a specific portion of the grant is DESIGNATED as being for the employee's health insurance. There's a whole section of my department that works with transferring funds that are paid to one area and designated to another.

    It's entirely possible that it's not only legal, but expected and authorized. I do know that much. I just don't know enough about the overall practice to be more specific.

  7. #7
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    Yes, if my spouse opted to sign up for an insurance plan, then that would be taken out of the grant, justifiably so. However, she remains on my plan, so how does the employer know to take part of their cost related to my employee+spouse plan out of my spouse's grant? Is it enough that I voluntarily disclosed that she is my spouse for them to justify taking that money from the grant? It's certainly possible that it is legal, but seems unlikely to me.

    This is actually helpful, since it seems like you might have never seen such a case arise.

    Here are some relevant federal statutes:

    2 CFR Part 200 - UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS
    2 CFR 200.431 - Compensation - fringe benefits.

    My argument is that the employer is paying for part of my fringe benefits (prorated for my spouse's health insurance) out of a grant that technically has nothing to do with me.

  8. #8
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Federal Grant, Spousal Benefits

    Let me ask you a question, however, since your employer is also paying for all of your wife's fringe benefits.

    Why does this upset you so much? And do you know (I do not mean surmise - I mean KNOW) that this is not provided for in the grant?

    Just FYI, the first question is not for the reason you will probably think. I get that you're concerned about potential illegality. That's not the point of the question.

  9. #9
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    That's just it. One question is this: is it my fringe benefit or my wife's? Certainly, she "benefits" from it, but my fringe benefits include the ability to cover my spouse's health insurance. She opted out of health insurance coverage specifically.

    The reason I am raising alarm bells, aside form the question of legality, is that this is an amount of money being taken out of the grant that was not disclosed -- neither the amount nor the fact that it was being deducted was disclosed. Therefore it has impacted the management of the grant budget.

  10. #10
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Federal Grant, Spousal Benefits

    Doesn't seem to weird to me honestly, but like cbg I don't deal with grants. And just brainstorming a bit below.....

    I'd be curious how much of the spousal part of the premium that the employer pays for an employee whose spouse does NOT work there but is covered as a dependent? If the employee part of the premium is paying 100% of the dependents then no, the employer shouldn't be also charging back the grant as that would be double dipping.

    How do they handle two employees who are spouses who also work there, but without the grant issue? Are they both covered separately as 2 employees and one covers the rest of the dependents? If not and they are both covered under one employee's plan, I have to wonder if that employee is getting any extra benefit other than a subsidized premium for the spouse just like every other employee whose spouse is NOT an employee. Is the difference in premiums enough to be on one or the other? That is, does the employer pay say 100% of the employee cost and none of the dependents? Have you priced out both scenarios or just assumed it would be cheaper to keep her on your plan? I guess what I am asking is what is the employee portion of "employee only coverage"? It almost sounds like they are getting the benefit for her grant benefits and that's because you chose to keep her on your fringe benefits and waive hers. Might be better to use both.

    Honestly I think it gets back to what the grant allows since she is an employee and is covered (albeit as a dependent) on the health plan. Why should the employer not be allowed to take advantage of that part of the grant?

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