ASAP: Medical Reimbursement Maximum Amounts

[Guest joeydell]

Is it permissible to allow contributions based on a percentage of pay instead of flat dollar amounts?

Example: Company A wants to allow employees to contribute an amount not to exceed their gross income for one pay period. This would make potentially everyone's maximum contribution to be a dollar amount.

I have been told that there has to be a fixed dollar cap across the board, but it has been my understanding that if the employer wants no dollar caps, the employee could potentially put 100% of his/her pay into the plan.