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  • Health Insurance Requirements - NJ New Jersey

    Can anyone tell me if a school board of education can change a requirement to obtain full-time status to a per hour/per week minimum that cannot be met by any employee? Currently full-time aides in our school district are entitled to health insurance. You are considered full-time if you work 25 or more hours per week. The board of education would like to change this to anyone which works over 33 hours per week. Currently there is only 32.5 hours possible to work in a week. This way they can strip aides of health insurance and nobody can ever receive them since you cannot ever reach the minimum required hours. Can this be legal???

  • #2
    Yes and it is legal. It isn't even uncommon to exclude certain classes of employees this way. I don't agree with it but it doesn't violate any laws. I'm going on a limb and assuming that at least a few employees work more than 6.5 hours a day. Aides typically don't work the hours that the students are not under instruction due to the nature of the job. Others such as teachers and adminstrators, do.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      Thank you for such a quick reply.
      All other employees (teachers, secretaries, custodians) are in the union. Unfortunately aides are not. All the others mentioned only have to work 22 hours to qualify as full-time. You are saying that the school can set a minimum hour requirement for one class of employee that is so high it cannot be reached? There are only 32.5 hours possible in a work-week at the school for aides, so how can they set the requirements to over 33 hours? Even if we wanted to work more hours, they are not available.

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      • #4
        They can because there is no law which says that they can not. I'm not sure why aides are not part of one of the unions. Certainly they should be able to join one of the support bargaining units. Or form their own if that is what they desire. Aides would qualify for membership in both NEA and AFT as paraprofesionals/support employees.
        I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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        • #5
          While the employer may not be required to offer health benefits under ERISA or other labor, the Internal Revenue Code imposes its own "non-discrimination" (mostly based on "highly compensated employees and not protected classes) tests on benefits plans.

          It's conceivable, but not likely, that the employer is violating the IRC tests. It wouldn't force the employer to offer you health insurance, it would only destroy the tax benefit for those employees that had the insurance.

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          • #6
            Maybe, although there are technically two different types of employer provided health coverage plans. 3rd Party Provider does not have a non-discrimination requirement and Self-Insured, which does have a non-discrimination requirement. The related law is IRC 105(h).

            The following is from IRS publication 15B (Fringe Benefits):

            Exception for highly compensated employees. If your plan is a self-insured medical reimbursement plan that favors highly compensated employees, you must include all or part of the amounts you pay to these employees in their wages subject to federal income tax withholding. However, you can exclude these amounts (other than payments for specific injuries or illnesses) from the employee's wages subject to social security, Medicare, and FUTA taxes.
            Last edited by DAW; 02-28-2008, 08:34 PM.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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            • #7
              125 cafeteria plans also have a non-discrimination requirement, and those plans are much much more common then 105 self insured plans.

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              • #8
                Agreed, although my understanding is that the Section 125 plans per se does not require that medical plans be offered to everyone, but rather only applies to the deduction handling if the medical plan is offered. My understanding is that it is perfectly legal under Section 125 to never offer medical plan coverage to part time employees.
                Last edited by DAW; 02-29-2008, 07:43 AM.
                "Reality is that which, when you stop believing in it, doesn't go away".
                Philip K. **** (1928-1982)

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                • #9
                  I should have added that both NEA and AFT offer participation in a group health plan as a benefit of membership. It is worth looking into.
                  I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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                  • #10
                    Originally posted by DAW View Post
                    Agreed, although my understanding is that the Section 125 plans per se does not require that medical plans be offered to everyone, but rather only applies to the deduction handling if the medical plan is offered. My understanding is that it is perfectly legal under Section 125 to never offer medical plan coverage to part time employees.
                    I agree too. Nothing in the IRC requires a plan to offer health insurance to anybody. It only defines where there can be a tax benefit.

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                    • #11
                      Thank you to all who are responding to my question. I have a lot of researching to do since I'm not quite sure what all this means. Maybe if I clarify my questions it can narrow it down.

                      1. Can a Board of Education change a policy mid-year to strip health insurance from current employees that receive them right now?
                      2. Isn't it discriminatory that all union members have a lower minimum hourly requirement to receive health insurance vs. non-union members? Not to mention that the union member at the very least have a minimum hourly requirement that can actually be met, and the non-union members don't.

                      Thanks again for your help...it is greatly appreciated!

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                      • #12
                        I am going to answer your second question only. The basic health coverage rules are IRC section 104-106. These are old federal laws that are very loosely written. There is no federal requirement that employers ever offer employees health care coverage. What little non-discrimination language exists in these laws talks about the taxability of the benefits, not whether the benefits need to be offered. There is a more recent law (IRC section 125) which is were the pre-tax aspects of certain employee deductions come from, but again this law is talking about taxability of transactions, not mandating coverage. You seem to be looking for an answer that there is some law that will force the employer to cover you, and at the federal level anyhow, I am pretty sure that no such law exists.

                        Employer having different coverage for different classes of employees is both common and legal. I worked for a manufacturing company where the hourly production workers had one type of coverage and the administrative workers had a different type of coverage. I have worked for a lot of companies where less then full time workers did not get coverage, period, and others where coverage was expensive.

                        If an employer has different health plans for say women and men, that is a type of illegal discrimination because a very specific law called Title VII is being violated. However having different heath plans for union and non-union employees may be discrimination but it is not illegal discrimination because no actual laws are being violated. Not all discrimination is illegal discrimination.

                        Maybe NJ has a rule that affects you, but what you are saying is not all that unusual. A very large big-box retailer who will not be named has been in the news a lot for having policies similar to what you describe (or worse), and this behavior has been described in the press as many bad things, but "illegal" is not one of them.

                        ------

                        Regarding the School Board's proposed change, I do not know. I do know that I think that COBRA kicks in if someone's existing health care gets yanked, but there are people on this board who know more about COBRA then I do.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

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                        • #13
                          The federal COBRA for *private* employers with 20 or more employees - if an employee's work hrs. are *reduced* (not being actually reduced in this case) & you no longer qualify for health ins., they have to offer COBRA. It's a qualifying event.
                          Last edited by Betty3; 02-29-2008, 06:08 PM.
                          Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

                          Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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                          • #14
                            Quick correction DAW. The controlling law is ERISA not IRC.

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                            • #15
                              That is sort of true and sort of not. If you read IRC 104-106, you will find that is indeed where the taxability of health care plans are discussed. And IRS is indeed the federal agency in charge of deteriming the taxability of benefits. These are early 1960s vintage laws. The much later (1980s) IRC 125 rules provide some additoinal changes to the original IRC health plan rules regarding pre-tax medical plan deductions.

                              The Employee Retirement Income Security Act of 1974 (ERISA) law is managed by DOL and covers the management of benefit plans including retirement and health plans. The IRC rules predate ERISA by a dozen years and are not directly affected by ERISA since these laws have unrelated scopes.
                              http://www.dol.gov/dol/topic/health-plans/erisa.htm

                              What both IRC and ERISA have in common, is that neither law mandates that employers provide coverage to employees in the OP's position. Some state and local laws are looking at the mandated coverage question, with arguably mixed results. Many unkind things have been said about the praticality of the MA rules and the more recent San Francisco rules are being thrashed around in court challenges.
                              "Reality is that which, when you stop believing in it, doesn't go away".
                              Philip K. **** (1928-1982)

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