"Significant" change in the cost of medical insurance
Posted 13 July 1999 - 04:59 PM
Posted 16 July 1999 - 08:27 AM
If the 9% increase is applied to , say a $50/mo contribution resulting in an additional $54 per year it may not be considered significant to one person ,but could to another.
On the other hand, if the 9% is applied to a $150 contribution resulting in an additional increase of $162 per year such an increase may be significant to everyone.
Unless you can come across some spcific IRS guidelines, I suggest using your best judgement.
Posted 20 July 1999 - 05:15 PM
Posted 20 July 1999 - 06:34 PM
I did speak with Harry Beker this morning regarding this employer. He said basically what you both said. The IRS feels that 'significant' is a subjective term, and would depend on the makeup of the employer.
Also, if the employer is going to consider the rate increase significant, the employees have two options: They could keep their current election and accept the increase in premium- At which time the employer would make the corresponding change to the employee's pre-tax deduction. OR They could revoke their current election and receive coverage under another health plan with similar coverage. What I did not realize here is that under this option the new election must still be offered or allowed thru the employer under payroll deduction. This could include individual policies- which I personally would not advise. Mr. Beker said that no other elective adjustments are allowed unless there has been a change in family status.
Anyway, thank you guys for the info. By the way, we are seeing IRS audit activity in Texas.