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salary reduction/deduction agreement
Benefits & Compensation
salary reduction/deduction agreement
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I've been searching for a form to use for pretax POP deductions and haven't really found any that I'd like to use. Surprisingly, my provider doesn't have one. I am making my own with information about
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Forums » Topic Forums » Benefits & Compensation » salary reduction/deduction agreement
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salary reduction/deduction agreement
posted at 6/1/2009 4:07 PM EDT
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Posts: 94
First: 2/7/2008 Last: 3/21/2011 |
I've been searching for a form to use for pretax POP deductions and haven't really found any that I'd like to use. Surprisingly, my provider doesn't have one. I am making my own with information about not being able to change elections during the Plan Year unless there's a qualifying event and that Social Security Benefits may be slightly reduced as a result of the election.
I also want to have them authorize that we can take the premium out of their final paycheck. Is there anything else that needs to be included AND what is the most that can be deducted from their final paycheck. Our insurance agent said we can deduct the premium not to exceed 50% of pay, but I can't find anything like that. And is it gross or net. Does the deduction require not taking wages below minimum wage? Any help would be appreciated. |
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salary reduction/deduction agreement
posted at 6/2/2009 7:10 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Authorized benefit deductions usually do not have the 50% limit nor do they play into the minimum wage argument. If they did, lots of employers would be in trouble!
Here is my caveat on our election forms: "I have read and understand the explanation I have received regarding my options under the L Inc. Health Care Plan. I understand that the company will make a deduction from my salary on a pretax basis during the plan year. I acknowledge that my election is irrevocable unless there is a change in my status. A change in status includes: marriage; divorce; death of a spouse or dependent; birth or adoption of a child; change in number of dependents; termination of employment or commencement of employment; commencement or return from anunpaid leave of absence; or any change in employment status that affects eligibility (a change in residence of you, your spouse or children; or your dependents either satisfies or ceases to satisfy requirements for coverage in age,student status, or any similar circumstances; or a change in your or your spouse's employment status.) I hereby apply for the option listed above. If necessary, I authorize L, Inc. to adjust my pay as required by my election. I understand that the benefit options I have elected will remain in force from January 1 until December 31, 2009 unless my family status or employment status changes." As to what to subtract from the final paycheck, you are going to have to analyze how you took premiums over the life of that employee. Here, we are required to cover through the end of the month, so we charge through the end of the month. And the paycheck in which we charge is the month they are currently being covered for. (example 6/5 and 6/19 paycheck deductions cover June premiums) But your setup could easily be different. |
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salary reduction/deduction agreement
posted at 6/2/2009 8:12 AM EDT
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Posts: 464
First: 6/30/2004 Last: 11/22/2010 |
We do something very similar, I do add a paragraph that requires an initial when they decline a benefit. I have had employees come back later saying they were not aware of a particular benefit, like std or ltd, or Flexible Spending. Not all are pre-tax for us.
Also, I refer to official plan documents regarding annual elections and qualifiying events for any changes. |
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