Flex plan/health costs

[k man]

due to the increasing cost of health insurance, an employer would like to shift more financial responsibility for health insurance to employees. currently, the employer pays 100% of the cost for the employee. the employer has a flex plan with a premium conversion/salary reduction component used for dependent care, health insurance for dependents etc.)

Would it be permissable to make such a change (ex. employer pays 85% employee pays 15%) and allow the employee to use the premium conversion/salary reduction plan to accomplish this so the employee can use pre-tax dollars?

[GBurns]

Yes. What you just described is a standard Premium Only (POP) section 125 Cafeteria plan.

[k man]

great so is there any type of formal notice required for this cost sharing or is it something that can be accomplished via a memo to employees with an election form for the amount of salary the employee wants deducted.

[GBurns]

A notice with time for review followed by an adequate form for the employee to sign should be sufficient.

[k man]

how much time is necessary for review? is their a time period required by the regs or ERISA?

[GBurns]

I have not found that there is any required time period, but, health insurance quotations have an expiry date and the health plan has an enrollment period that must be finished before the plan start date.

These dates would automatically provide a limit to the time given for review. If the employee does not respond in time they would miss the enrollment.