Flyboyjohn Posted September 25, 2014 Share Posted September 25, 2014 In the new world of age-based rates for each individual covered by a small group plan does anyone disagree with the proposition that the employer violates ADEA if it says "I'll pay $XXX/month towards your premium and you pay the balance" (a so-called defined contribution approach)? I know that ADEA permits the employer to pay a percentage of the age-based premium, it just prohibits the employer from paying a fixed amount. Thanks Link to comment Share on other sites More sharing options...
Peter Gulia Posted September 25, 2014 Share Posted September 25, 2014 An executive agency's interpretation (mostly from 1979) of the statute is here:http://www.gpo.gov/fdsys/pkg/CFR-2013-title29-vol4/pdf/CFR-2013-title29-vol4-sec1625-10.pdfIf the group health plan uses regulated health insurance contracts (rather than an employer's unfunded payments or a VEBA), isn't it good enough that the employer's actual payment is equal for every employee? Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
Flyboyjohn Posted September 25, 2014 Author Share Posted September 25, 2014 Don't think so, see the statement in 1625.10(d)(4)(ii)©on contributory plans: "The required contribution of participants may increase with age so long as the PROPORTION of the total premium required to be paid by the participants does not increase with age." If the employer's contribution amount is fixed the proportion of the increasing premium that the employee pays increases with age which is prohibited. Link to comment Share on other sites More sharing options...
Peter Gulia Posted September 25, 2014 Share Posted September 25, 2014 But does paragraph (a)(1) make it unnecessary to use (d)(4)? Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
Flyboyjohn Posted September 25, 2014 Author Share Posted September 25, 2014 Not in my humble opinion (the specific trumps the general) but I respect your right to reach a different conclusion. Link to comment Share on other sites More sharing options...
Peter Gulia Posted September 26, 2014 Share Posted September 26, 2014 I haven't reached any conclusion. Rather, I've enjoyed the opportunity to learn from you. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
jpod Posted September 26, 2014 Share Posted September 26, 2014 If the employee population is small enough Federal ADEA doesn't apply to the employer. There may be a State ADEA law to consider, however, that does not have a minimum size threshold. Link to comment Share on other sites More sharing options...
Flyboyjohn Posted September 26, 2014 Author Share Posted September 26, 2014 Good point, I think Federal ADEA kicks in at 20 employees Link to comment Share on other sites More sharing options...
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