BigLaw Benefits (Healthcare) Forum

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Anonymous User
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Joined: Tue Aug 11, 2009 9:32 am

BigLaw Benefits (Healthcare)

Post by Anonymous User » Fri Oct 22, 2021 1:53 pm

Maybe it's just that my only other reference point is the federal government, but my V20 seems to have terrible benefits. Salary info is easy to find, but it's harder to compare firms on healthcare costs, 401k matches, etc. Let's get some data points; I'll start.

Firm: V20
Location: Boston
HC Plan: BCBS high deductible w/ HSA
HC Employee Contribution: ~$400 monthly (employee only)

Edit: removing 401k matching since it's clearly a red herring. Thanks all!
Last edited by Anonymous User on Fri Oct 22, 2021 2:25 pm, edited 1 time in total.

hoos89

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Re: BigLaw Benefits (Healthcare + 401k Matching)

Post by hoos89 » Fri Oct 22, 2021 2:13 pm

I'm not aware of a big law firm with a 401k match for associates.

The Lsat Airbender

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Re: BigLaw Benefits (Healthcare + 401k Matching)

Post by The Lsat Airbender » Fri Oct 22, 2021 2:18 pm

hoos89 wrote:
Fri Oct 22, 2021 2:13 pm
I'm not aware of a big law firm with a 401k match for associates.
There's a specific reason for this: it'd mess up their nondiscrimination testing wrt nonlegal employees. It's basically mathematically impossible for a traditional law firm to offer a 401(k) match to it's higher-compensated employees (i.e. the lawyers).

Anonymous User
Posts: 428116
Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare + 401k Matching)

Post by Anonymous User » Fri Oct 22, 2021 2:19 pm

Anonymous User wrote:
Fri Oct 22, 2021 1:53 pm
Maybe it's just that my only other reference point is the federal government, but my V20 seems to have terrible benefits. Salary info is easy to find, but it's harder to compare firms on healthcare costs, 401k matches, etc. Let's get some data points; I'll start.

Firm: V20
Location: Boston
HC Plan: BCBS high deductible w/ HSA
HC Employee Contribution: ~$400 monthly (employee only)
401k Match: no
We’re (probably) at the same firm and same office. Health insurance is super high (I have the PPO, so it’s like $500/month). Our other benefits are fine, though.

Anonymous User
Posts: 428116
Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare + 401k Matching)

Post by Anonymous User » Fri Oct 22, 2021 2:22 pm

The Lsat Airbender wrote:
Fri Oct 22, 2021 2:18 pm
hoos89 wrote:
Fri Oct 22, 2021 2:13 pm
I'm not aware of a big law firm with a 401k match for associates.
There's a specific reason for this: it'd mess up their nondiscrimination testing wrt nonlegal employees. It's basically mathematically impossible for a traditional law firm to offer a 401(k) match to it's higher-compensated employees (i.e. the lawyers).
This is only partly true. Anon because I’m an ERISA attorney and I don’t want to be outed.

Firms can easily offer matching to all employees if it used a safe harbor plan or structured profit sharing so that it meets the nondiscrimination tests. They actually aren’t hard to meet.

Firms just don’t want to offer associates money.

Most firms have 2 plans: one for partners and staff and one for associates. The one for partners/staff have profit sharing/matching. Staff get anywhere from 5-10% at most firms so that the firms can still pass NDT even though they give partners a lot as well. Since associates are considered HCEs (highly compensated employees) the IRC doesn’t care how these employees are treated.

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Anonymous User
Posts: 428116
Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare)

Post by Anonymous User » Fri Oct 22, 2021 2:26 pm

OP here - thanks all for setting me straight on 401k. Let's just keep this focused on healthcare then.

Anonymous User
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Re: BigLaw Benefits (Healthcare)

Post by Anonymous User » Fri Oct 22, 2021 2:36 pm

Anonymous User wrote:
Fri Oct 22, 2021 2:22 pm
The Lsat Airbender wrote:
Fri Oct 22, 2021 2:18 pm
hoos89 wrote:
Fri Oct 22, 2021 2:13 pm
I'm not aware of a big law firm with a 401k match for associates.
There's a specific reason for this: it'd mess up their nondiscrimination testing wrt nonlegal employees. It's basically mathematically impossible for a traditional law firm to offer a 401(k) match to it's higher-compensated employees (i.e. the lawyers).
This is only partly true. Anon because I’m an ERISA attorney and I don’t want to be outed.

Firms can easily offer matching to all employees if it used a safe harbor plan or structured profit sharing so that it meets the nondiscrimination tests. They actually aren’t hard to meet.

Firms just don’t want to offer associates money.

Most firms have 2 plans: one for partners and staff and one for associates. The one for partners/staff have profit sharing/matching. Staff get anywhere from 5-10% at most firms so that the firms can still pass NDT even though they give partners a lot as well. Since associates are considered HCEs (highly compensated employees) the IRC doesn’t care how these employees are treated.
Also an ERISA attorney and seconding this. Firms know that the numbers that matter for associates are their salaries and bonuses, and giving extra money into a 401(k) instead of in salary or a bonus would actually hurt them when it comes to recruiting first years, so they have chosen to skip 401(k) matches.

But back to health benefits. My firm has a scaled contribution for health benefits depending on your salary, and I think our cheapest plan is $300/month, but family coverage quickly shoots up to be over $1000 for the PPO. It's a lot...but if you think the amount you pay as an associate is bad, wait until you find out that partners pay their entire premium (with no employer contribution) and they can't do it pre-tax....

Anonymous User
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Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare)

Post by Anonymous User » Fri Oct 22, 2021 2:37 pm

Okay we've settled the 401k crap can we please get back to comparing firms? If TLS is good at one thing, it's missing the point.

Anonymous User
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Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare)

Post by Anonymous User » Fri Oct 22, 2021 3:44 pm

Anonymous User wrote:
Fri Oct 22, 2021 1:53 pm
Maybe it's just that my only other reference point is the federal government, but my V20 seems to have terrible benefits. Salary info is easy to find, but it's harder to compare firms on healthcare costs, 401k matches, etc. Let's get some data points; I'll start.

Firm: V20
Location: Boston
HC Plan: BCBS high deductible w/ HSA
HC Employee Contribution: ~$400 monthly (employee only)

Edit: removing 401k matching since it's clearly a red herring. Thanks all!
My V10 lets us choose between two BCBS plans - one is a HDHP and the other is not, with better benefits accordingly. For self coverage, the employee monthly contributions are about $150 and $350 respectively. So that's about $3,000 annual difference between my firm and yours on the HDHP offering.

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Wanderingdrock

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Re: BigLaw Benefits (Healthcare)

Post by Wanderingdrock » Fri Oct 22, 2021 4:17 pm

Anonymous User wrote:
Fri Oct 22, 2021 2:26 pm
OP here - thanks all for setting me straight on 401k. Let's just keep this focused on healthcare then.
There can actually be meaningful distinctions in 401(k) offerings. 1 or 2 of the very tippy top firms (I think boutiques) offer matches or significant contributions - just not Biglaw firms. Among Biglaw, though, there can be better or worse mutual funds/self-management options, which can add up to significant gains over a 10 or 20 year career. And, most significantly, my firm does a "mandatory" contribution scheme where a percentage of your paycheck - determined by the firm - is automatically deducted and dropped into your account pre-tax. This doesn't count against your voluntary contribution limit, so you can put $19,500 in pre-tax as your voluntary contribution, then you get another chunk pre-tax as your mandatory contribution, and whatever's left under the $58k cap you can contribute as your Mega Backdoor Roth. If for some reason you don't want to put that much in, you reduce your voluntary and just have the mandatory going in.

At first glace, some juniors get annoyed about this ("What do you mean you require me to contribute X% to my 401(k)??") but it's an incredible tool - really scales up your pre-tax contribution capabilities.

Anonymous User
Posts: 428116
Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare)

Post by Anonymous User » Mon Oct 25, 2021 9:20 am

Anonymous User wrote:
Fri Oct 22, 2021 3:44 pm
Anonymous User wrote:
Fri Oct 22, 2021 1:53 pm
Maybe it's just that my only other reference point is the federal government, but my V20 seems to have terrible benefits. Salary info is easy to find, but it's harder to compare firms on healthcare costs, 401k matches, etc. Let's get some data points; I'll start.

Firm: V20
Location: Boston
HC Plan: BCBS high deductible w/ HSA
HC Employee Contribution: ~$400 monthly (employee only)

Edit: removing 401k matching since it's clearly a red herring. Thanks all!
My V10 lets us choose between two BCBS plans - one is a HDHP and the other is not, with better benefits accordingly. For self coverage, the employee monthly contributions are about $150 and $350 respectively. So that's about $3,000 annual difference between my firm and yours on the HDHP offering.
This is what I was afraid of!

Anonymous User
Posts: 428116
Joined: Tue Aug 11, 2009 9:32 am

Re: BigLaw Benefits (Healthcare)

Post by Anonymous User » Wed Oct 27, 2021 12:03 am

market paying biglaw here (tho not tippy top v20)-

2 healthcare options both bcbs: 1 w/ an HSA which I have no clue about and am not financially savvy + a second PPO with no deducitble 300/month for just an associate but for me and my wife it's nearly 900 a month.

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