Employer's portion of premium cost

[Guest benman]

Under what circumstances can an employer decrease the portion of the premium payment for which it is responsible under an insurance arrangement provided under its cafeteria plan? For example, if the employer pays 75% of the premium for its employee's health insurance, and the employee pays 25%, can an employer declare in the middle of a plan year that it will only pay 50% of the premium cost, requiring employees to make up the rest?

[GBurns]

Unless there is some contractual reason (employement or collective bargaining etc) the employer can do as he wishes. There is no legal requirement (except in Hawaii) to even provide health insurance much less to pay any particular portion.

However, the employer should be aware that either state law (especially for small groups)or the insurance contract (most carriers for even large groups)usually have a mandatory employer percentage contribution that is built into the premium rate and is therefore a part of the contract. To make the change that you indicate might mean violating the insurance contract and could have severe consequences.