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BenefitsLink > Q&A Columns >

Q&A: Section 125 Plans

Answers are provided by Robyn Morris of R. C. Morris, Incorporated

Differing levels of benefits to different classes of employees

(Posted January 12, 1998)

Question 55: Currently employees working 30 or more hours per week are entitled to participate in our 125 plan. They are given a dollar amount to purchase their choice of insurance. We are considering expanding this benefit to employees working 20 or more hours per week. Can we offer different dollar amounts for those who are working less hours? Can we have medical and dental plan options that are available only to employees working less hours?

Answer: Yes, you may offer a different benefit credit amount to employees in a "part-time" class. Yes, you may offer INSURED products to the population you choose. If your company is SELF-INSURED, you will have some discrimination testing requirements to meet.

Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.

Copyright 1997-1999 R. C. Morris, Incorporated
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