Biglaw, Health Care / Medicine

Leaked Memo: Which Biglaw Firm Is Gouging Employees On Health Insurance?

Which Biglaw firm recently decided to pass off the rising costs of its high-end health plan onto all of its employees?

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Ever since the Affordable Care Act (ACA) went into effect, employers across the country have sounded complaints about the rising costs associated with health insurance premiums. With premiums expected to rise significantly in 2016, these gripes have become all but deafening. We hadn’t heard such rumblings from any of America’s largest law firms — until today.

While some law firms have chosen to scale back on various associate benefits and perks, the one benefit no one expected to see overhauled to both staff members’ and associates’ detriment was health insurance.

Which Biglaw firm recently decided to pass off the rising costs of its high-end health plan onto all of its employees, supposedly for their own benefit?

The firm in question is Debevoise & Plimpton, and a memo explaining the costly changes to its medical benefits for 2016 and beyond went out firmwide on October 30. The firm’s health plan qualifies for the ACA’s 40 percent “Cadillac tax” that’s set to take effect in 2018, and the only way it could take appropriate action to “minimize the potential financial impact” was to increase expenditures for employees. The memo describes the many ways in which all of Debevoise’s employees — except partners, of course — will be negatively affected. One angry Debevoise source of ours wants to know: “Where’s the raise to go with it?”

First and foremost, all employees at Debevoise can look forward to about an 8 percent increase to their payroll deductions for medical insurance, as well as increases in co-pays and out-of-pocket maximums. Here’s a table listing all of the firm’s plan changes:

Perhaps what’s even worse than the fee hike is the fact that Debevoise is moving to a plan that will require all employees to pay for 10 percent of all in-network services that previously had no co-pay, such as diagnostic lab tests, X-rays, imaging (CT scans and MRIs), surgeons’ fees, anesthesia, ambulance charges, home health care services, and skilled nursing services. Debevoise & Plimpton is sending a very clear message to its employees with the institution of this plan: do not get seriously ill, do not get seriously injured, and do not get pregnant, because if you do any of these things, you’ll pay dearly.

Last, but certainly not least, Debevoise’s list of health-insurance-plan horribles includes a new spousal/same-sex domestic partner surcharge. Here it is, for your scornful review:

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Debevoise is strongly committed to providing coverage for our employees, but we also believe that other employers should be equally responsible for providing health insurance coverage to their own workforce. Therefore, if your spouse/same sex domestic partner works, and his/her employer offers a health insurance program, you will be required to pay a $150 monthly surcharge in addition to your standard payroll deduction in order for your spouse/same sex domestic partner to receive coverage on our plan.

With this spousal surcharge, Debevoise is effectively making things even harder than they already are for married employees that work for the firm. Imagine the difficulties families will face thanks to this new rule. Take, for example, the case of two working parents with children: if both husband and wife are forced to have their own insurance plans with two different providers, whose insurance will the kids fall under? If anything, Debevoise is encouraging its employees to lie about their spouses’ health insurance coverage to make their lives simpler and avoid being further nickel-and-dimed by the firm.

What’s really worrisome is that Debevoise mentions that benefit adjustments like these — including the spousal surcharge — are already in place or are currently being planned at many “peer firms.” Is your firm instituting across-the-board rate hikes and spousal surcharges for health insurance? Please drop us a line. We’d love to hear from you.

We wish all of the employees at Debevoise & Plimpton the best of luck as they try to navigate the dangerous curves the firm’s new health insurance plan has thrown their way.

(Flip the page to read Debevoise’s memo on changes to its medical benefits in full.)

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