Group Health
Question
TN employer based health insurance?
As a small buisness owner, I am no longer able to afford to pay any portion of the group premium. However, I have a couple of employees that willing to pay 100% of their insurance. I have no problem with this, but I was told that it is against the laws. That employers are required to pay at least 50%. I have looked up lexis nexis to find the laws on this, but am not finding anything on this. Does anyone know of where else I could find info on this? We are in Tennessee.
5 months ago - 2 answers
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Chaz - There's nothing "illegal" about it. The problem is that the insurance companies usually require the employer to pay 50% of the employee premium. The reason has to do with "adverse selection." Insurance works because, in theory, everyone pays a premium into the "pot" so that the person who has a big claim has enough money available (in the "pot") to pay for the claim. The insurance companies try to keep a large group of employees on the plan by reducing their cost by requiring the boss to pay 50% of it (this encourages the employee to take the coverage because, well, he only has to pay for half of it). However, once the boss quits paying any of the cost, typically what happens is that the younger and healthier employees drop off the plan (because they can get coverage cheaper on their own or via a spouse, etc.). What's left on the plan, then, are the older and sicker employees, who cost more to insure in the first place. Again, it's not the law, it's a contractural requirement from the insurance company. Hope this helps a bit. If you have more questions, see below....
Source(s)
by Arthur
5 months ago
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