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Higher-paid workers get bigger bills for group health insurance





Some employers use salary levels to determine how much their workers contribute toward their health insurance premiums. The more the workers earn, the more they pay toward their premiums.

It is not a terribly new idea, says Charles Coonrod, principal of Foundation Strategies Inc. in Katy, Texas, an employee benefits brokerage firm. "We saw this as early as the 1970s where it was somewhat common to have deductibles vary by salary band or class of employee," he says.

Some larger companies including Pitney Bowes and General Electric have based health insurance premiums on their employees' wages for more than 20 years, says Elliot N. Dinkin, president and CEO of Cowden Associates Inc. in Pittsburgh, an employee benefits consulting firm.

Now, human resources and health insurance experts expect even more employers to adopt this strategy, which is perfectly legal, as health care costs continue to rise and the Affordable Care Act takes hold.

"I do think that health care reform is bringing about a resurgence of interest in this contribution strategy," Coonrod says.

Tim Nimmer, chief health care actuary at Aon Hewitt of Lincolnshire, Ill., says the strategy, while not new, has received a lot of attention lately. As a result, he says, employers who might have considered the strategy before but weren't sold on it are rethinking it. With all the talk about Obamacare, "they might have heard or read about it in the news," he says, "and so they are asking, 'Is this something we can consider?'"

'Right thing to do'

Nimmer believes that with all focus on health care lately, company executives have become more conscious of how health insurance spending impacts their employees' take-home pay. The idea of basing premiums on salary level is gaining traction, he says, "because many executives feel it is the right thing to do in order to make health care more affordable for their lower-income employees."

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