3 ms·

How can such a plan exist? Or am I missing something?

throwaway2048 8y ago
You are missing the fact that its basically his employer self insuring, as a form of unpaid compensation. The only thing the insurer is doing is acting as a billing agent.
- zrail 8y ago
  It’s not self-insurance, necessarily. When OP says “zero premium” they mean (even if they don’t know it) that their employer is paying 100% of their premium.
Fins 8y ago
What they said, I worked for an outfit with a similar plan (lower max. out of pocket, though). They were self-insured, though, and the latest year I have data for, it was about $20K/year for health coverage.
- user72685 8y ago
  Also worth noting that self-funded plans will have their premiums set based on the plan's actual claims experience, which means employers with a sicker risk pool will pay more. This also encourages discrimination against older or unhealthy/disabled workers, since they statistically cost more. (This is illegal, but it happens all the time and is hard to prove.)
  - Fins 8y ago
    Well, when I was working there, employee premiums where exactly 0, company picking up the entire tab, but I am quite sure that this stuff does happen.
    - user72685 8y ago
      The employer picking up 100% of the premiums (which, in a self-funded plan like this, are paid into the plan trust) just makes this kind of stuff even more likely. If an employee or employee's covered spouse or dependent has health issues requiring $XXX,XXX/year of treatment, getting rid of the employee will directly save the company $XXX,XXX/year. Quite a powerful incentive for scumbags, even if it's completely immoral and illegal (ERISA 510).
      - Fins 8y ago
        Of course. Since the company actually does have some decency (being privately held helps, too) eventually they just decided, as I hear, to simply convert to a (still generous) regular insurance plan.
        Fins 8y ago
        Granted, the other reason was that because of Pajamacare, health plans that are "too good" get taxed excessively.

throwaway2048 8y ago

You are missing the fact that its basically his employer self insuring, as a form of unpaid compensation. The only thing the insurer is doing is acting as a billing agent.

zrail 8y ago
It’s not self-insurance, necessarily. When OP says “zero premium” they mean (even if they don’t know it) that their employer is paying 100% of their premium.

Fins 8y ago

What they said, I worked for an outfit with a similar plan (lower max. out of pocket, though). They were self-insured, though, and the latest year I have data for, it was about $20K/year for health coverage.

user72685 8y ago
Also worth noting that self-funded plans will have their premiums set based on the plan's actual claims experience, which means employers with a sicker risk pool will pay more. This also encourages discrimination against older or unhealthy/disabled workers, since they statistically cost more. (This is illegal, but it happens all the time and is hard to prove.)
- Fins 8y ago
  Well, when I was working there, employee premiums where exactly 0, company picking up the entire tab, but I am quite sure that this stuff does happen.
  - user72685 8y ago
    The employer picking up 100% of the premiums (which, in a self-funded plan like this, are paid into the plan trust) just makes this kind of stuff even more likely. If an employee or employee's covered spouse or dependent has health issues requiring $XXX,XXX/year of treatment, getting rid of the employee will directly save the company $XXX,XXX/year. Quite a powerful incentive for scumbags, even if it's completely immoral and illegal (ERISA 510).
    - Fins 8y ago
      Of course. Since the company actually does have some decency (being privately held helps, too) eventually they just decided, as I hear, to simply convert to a (still generous) regular insurance plan.
      - Fins 8y ago
        Granted, the other reason was that because of Pajamacare, health plans that are "too good" get taxed excessively.