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different health benefits within same company
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different health benefits within same company
Discuss employment-law issues such as family leave, overtime, disabilities law, harassment, immigration and termination.
What is the regulation about offering different health benefits to employees of the same company? May be based on geographic region or on job position.
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Forums » Topic Forums » Legal Forum » different health benefits within same company
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different health benefits within same company
posted at 8/25/2009 8:12 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
It is generally legal. Many times different locations (especially in different states) don't have the same coverage networks, so usually that is easier to explain that differences within job types/levels. It is also easier to have a difference based on # of hours worked (part time pay more than full time for example)
Some plans however must pass nondiscrimination testing if they are subject to Section 125 pretax deductions (either for the employee or the employer) because of the tax qualification (much like 401k plans). In that case you have to compare benefits paid for highly compensated/key employees vs non-highly compensated (these are specificly defined words in the Section 125 regulations). If your HCEs are getting a much larger benefit than NHCEs, you could have issues on whether the deductions can be pretax for the HCE group. From a practical standpoint, it is harder for HR to administer multiple plans with multiple differences. Communication is key and it is easy to get mixed up unless you are paying strict attention to who has what coverage. This also might plan into the size of each group -- do you really want a different plan for less than x employees? What participation is required, etc? We have a dual option plan right now -- and that is hard enough to administer when each employee has the choice (not dependent on location or level). |
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