Nevada: Legislature Defines “Health Benefits” for Lower-Tier Minimum Wage Rate


All Private Employers with NV Employees


January 1, 2020


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Senate Bill 192 recently passed defining “health benefits” for purposes of employers paying the lower-tier minimum wage. Specifically, employers may pay a lower tier minimum wage if they provide health benefits to employees. There has been some controversy over what “health benefits” means. Last year, in MDC Restaurants, LLC v. The Eighth Judicial Dist. Court, the Nevada Supreme Court stated that health benefits must be “at least equivalent to the one dollar per hour in wages that the employee would otherwise receive” for the higher-tier minimum wage, and cost the employer at least an additional dollar in wages.

Now, the state legislature has taken matters into its own hands in an attempt to set forth a more specific rule. Employers must provide a health benefit plan that includes coverage for:

  • Ambulatory patient services;
  • Emergency services;
  • Hospitalization;
  • Maternity and newborn care;
  • Mental health and substance use disorder services (including behavioral health treatment);
  • Prescription drugs;
  • Rehabilitative and habilitative services and devices;
  • Laboratory services;
  • Preventive and wellness services and chronic disease management;
  • Pediatric services (not required to include oral and vision care); and
  • Any other health care service or coverage level required to be included in an individual or group health benefit plan under certain state laws.

The plan must have a 60% actuarial value, or be a Taft-Hartley trust that qualifies as an employee welfare benefit plan pursuant to ERISA or Internal Revenue Code.

This definition of health benefits is different from what was stated in MDC Restaurants. Employers must take care to continue to comply with MDC Restaurants until January 1st when the new standard takes effect. However, before entering open enrollment this year for health benefit plans that will cross over into the new year, make sure the plans satisfy both the MDC Restaurants and SB 192 tests.

Action Items

  1. Review and update minimum wage rates paid to employees in accordance with this new law.
  2. Review health insurance benefits offered to employees for compliance.
  3. Update payroll procedures and practices accordingly.
  4. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2019 ManagEase

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