Thank you all for the responses. Employer is part of a consortium of several other government agencies - that is the group for health insurance purposes for both providers. Let's say the total cap for the cafeteria plan is $1,500/month for union members (this amount is different for unrepresented employees). We have tiered rates so individual-only coverage is cheaper than family coverage. Let's say the cheapest medical plan is for individual coverage at $500/month. Employer offers two health insurance providers.
I'm trying to figure out where our scenario fits. For example, Employee A was paying $500/month for individual coverage, and Employee B was paying $1000/month for family coverage, and both are using their cafeteria plan to pay for those premiums. Now that the employer is allowing opt out, both opt out, and they want to take as cash back the premiums they were paying (i.e. $500/month and $1000/month) out of their cafeteria plan. Basically, employer is not offering a flat opt-out credit for all employees; what the employees take as cash back is based on the premiums they were paying out of their cafeteria plan.
Is this allowed? Is having a cafeteria plan making it more complicated to have an opt out for ACA purposes? Since the employer is providing a cap of $1,500 in the cafeteria plan, is there any affordability issue? If more than 95% of our employees decide to opt out, do we get hit with the "A" penalty, even though employer did offer coverage and it was the employee who decided to opt out? Does employer get hit with any penalty ("A" or "B") if the only way employer allows opt out is by showing that they are covered under their spouse's employer-sponsored health insurance?
FYI, we will be consulting with appropriate counsel, but I just want to get ahead of that so I can understand a little better what the potential issues may be.
