Employee Benefits Law Related Questions

Employers are legally mandated to provide basic employee benefits, but many companies find additional benefits necessary to boost employee morale and the overall efficiency of an employee.

Here are some frequently asked questions about employee benefits.

What is meant by “employee benefits”?

Employee benefits mean additional benefits, or perks, that an employer gives to employees. For example, some employee benefits include, but are not limited to health insurance, life insurance, vehicle upkeep, meal subsidies, disability benefits, rent allowance, education assistance, vehicle purchase loans, etc. Employee benefits may vary from company to company, but the ones listed here are some of the basic ones most companies offer.

Can an employer exclude all Medicare eligible employees from the employer sponsored group health plan?

A company cannot exclude Medicare eligible employees from the employer sponsored group plan. The employer must offer the same health plan to all employees, irrespective of age, failing which they run the risk of violating age discrimination laws. Under Medicare rules for employees 65 or older, if an employer employs more than 20 employees, the private health insurer must pay the medical bills before Medicare benefits are activated. The employer must also take care of any differences, deductibles, etc. If the company has fewer than 20 employees, Medicare will pay the medical bills first, and any supplement should be taken care of by the employer's group health plan.

Is it legal for an owner to deduct payment of vacation time from an employee’s pay check after the supervisor has approved and paid him for it?

Vacation time is called both an accrued as well as an earned benefit which must be paid and honored. Since the supervisor in this case did so with actual or apparent authority, the owner should discuss the issue with the supervisor but will likely need to honor the award.

Can a company start charging benefit insurance plan premiums when an employee is absent under the Family and Medical Leave Act (FMLA)?

When an employee is on Family and Medical Leave Act (FMLA) leave, an employer must maintain his benefits at the same status they were in when the employee left on leave. However, if the company changes the entire health insurance plan for all full-time employees then it has the right to change the particular employee’s plan as well.

Is an employer within its rights to alter or change terms and conditions of its employee benefits package?

Employee benefits are a job perquisite which an employer is not required to offer at all. However, the employer is permitted to change the terms and conditions of benefits offered or can even eliminate them entirely at any time, unless the employee has a contract with a clause stating that the employee benefits will never change, or something to that effect.

If an employer in New Jersey wishes to offer employees with health benefits, what are the minimum hours of work required to consider an employee full time?

If the employer is a “small employer” employing between 2 and 50 eligible employees, the New Jersey Small Employer's Health Coverage Program rules would apply. The minimum hours for an employee to be considered eligible are 25.

Can an insurance company cancel the benefits of an employee who has employee benefits and is about to undergo surgery?

An employer cannot terminate health insurance without the employee being given advance notice. A reason for cancellation can be demanded from the insurer. If the employer has terminated the insurance without notice for some reason, the employee should be able to demand for the reinstatement of insurance.

In Massachusetts, is an employer entitled to pay employee benefits like medical insurance while the employee is on a leave of absence?

There seems to be no provision under Massachusetts law that requires an employer to continue to pay for the employee’s medical insurance while the employee is on a leave of absence unless the leave of absence contract or agreement requires it or unless the leave of absence is medically related.

If a salaried employee who has worked for a company in Tennessee gets two weeks of vacation whereas the other employees get four weeks, does this amount to discrimination? Also, is it legally mandatory for the employer to provide vacation days for employees?

In the absence of any written employment contract to the contrary, employment in Tennessee is considered “at-will”. Under the at-will employment doctrine, the employer gets to frame the rules of employment. There are no laws mandating an employer provide vacation days or benefits to employees as long as the employer is not denying these on the basis of age, race, sex, or disability, which would amount to discrimination. The amount of leave allowed will also depend upon the classification of the employee and the IRS and the Department of Labor rules are very strict on this. But misclassification, if a complaint is filed, can at best only result in a proper classification by the Department of Labor after an investigation is conducted and may not affect employee benefits at all.

Since employee benefits, apart from the basic ones provided by the employer, differ from employer to employer, employees and employers alike may have many questions. It may be helpful to gain insight into the legal issues surrounding employee benefits from legal experts.