If you decline healthcare benefits will your employer give you an instant raise?

[dkf]

According to the logic of the Cadillac plan proponents any decrease in health care benefits will be paid to you in salary. If that is true then why isn't it true that voluntary declination of benefits results in salary increases?

Many people get benefits from their spouses plan. I'm sure people who dropped benefits will will tell you they didn't get this raise Krugman etal are assuming they got.

[OHdem10]

1. Want to buy a nice bridge???

[Hassin Bin Sober]

2. I dropped my health insurance to go on my partner's plan ...

I didn't get a raise but we got the pleasure of being taxed on it (chalk another one up to separate but equal). Can't wait to see if get a double whammy for having a "Cadillac plan"

[LiberalEsto]

3. Ha

:rofl:

[dsc]

4. some employers do offer a cash incentive to decline benefits

but they are few and far between.

[jpak]

5. If you decline health benefits, your employer should give you a brain

:thumbsdown:

[dkf]

6. Dual coverage usually doesn't make sense.

Of course you would decline in that case.

And since you usually need a family plan to cover kids not throwing the spouse on the plan is the stupid thing to do

[stray cat]

7. Sorry - the union won't let you. Unions prevented me from giving health insurance during probation

as well.

[high density]

8. At a previous employer, yes, that is how it worked

But at my current employer I have a certain amount of money that goes toward my benefits and if I don't use it, I lose it. They give me no incentive to choose a cheaper plan.

[dkf]

10. This practice is relatively uncommon though.

And should not be assumed to be the prevailing outcome of cutting benefits.

[noamnety]

9. I get a cash buyout

because I'm on my spouse's plan. That money goes to pay the family option on the spouse's plan.

Generally what happens is this:
The school's budget gets squeezed because health insurance rates increase at crazy rates.
The teachers have to pick between salary cuts or shittier cheaper insurance. They pick the second.
Because of that, my buyout decreases. Meanwhile, the rates I pay through the spouse keep going up.
While that's happening, some teachers resent that those not getting insurance through the school get a buyout, and feel that we should give that up since insurance is at a crisis point - they don't seem to realize I have the same expense as them, I'm just paying it through a different organization.

I was hoping that health reform would remove the tie between insurance and employment. It would be nice if everyone had the option of picking the best plan for themselves without having to be at the mercy of what a team of 20 other employees decides, or having their decision tied to what an organization's budget is. It would be nice if I could stay in the same policy as the rest of my family without my coworkers resenting that I use my benefits that way. It would be nice when we get laid off (which every staff member at our school has been, at least once, at least cut to part time hours) if our insurance would remain stable.

In my last job we had a "cafeteria plan" - we could opt to put a portion of our pretax salary toward health insurance, life insurance, dependent care, etc - or take the money as salary. But that was an employee owned company, so we weren't having to feed the stock holders.

[dkf]

11. Cafeteria plans just let you use pretax money to buy coverage

That is just you making a decision on what you want to pay for. That IS your salary being expensed by you.

[noamnety]

12. I guess it depends how you look at it.

When I got hired in, we negotiated salary, and the cafeteria plan was on top of the negotiated salary. There's a set amount of money the company is going to pay for my benefits. Either they can make the decisions, or they can give me the money and let me make the decisions.

I liked it better that way - for exactly the reasons hinted at in the OP. Some benefits aren't needed by all people. In a regular package, if you don't use the benefit the stockholders pocket the money that would have been budgeted for it. In a cafeteria plan, if you don't need the benefit the employee pockets the money.

[CrispyQ]

13. Years ago my husband had a cafeteria plan. It was one of the best plans I've ever seen.

The employee could refuse coverage as long as they could prove they had coverage. If they did refuse, the monthly premimum was added to their check. It was the coolest plan I've ever seen. Each employee was given X number of benefit dollars to spend - enough to cover a family with health & dental. If the employee didn't spend their benefit allowance, they could opt to have it paid back in their check or they could take it as paid time off.

You are right, that is a rare company that offers that.

[DrToast]

14. Yes, I've heard of that

So?

[dkf]

15. It's the exception not the rule.