Premium reduction

[card]

An employer determined the employee contribution for health insurance to be 5% of premium. The employer notified employees, and set out the per check dollar amount for each benefit option. Then the employer realized that the insurer had reconsidered the rate, and slightly lowered the premium. Based on the new premium, employees would be paying 5.09%, instead of 5%.

I know this raises alot of issues. Potential breach of fiduciary duty if the employer doesn't somehow "correct" this: potential prohibited transaction, potential loss of trust exemption, section 125 change rules, etc etc etc.

On the other hand, the cost to correct might exceed the dollars involved.

The employer would like to use the actual rate for COBRA purposes, but leave the active employee population alone.

Has anyone confronted this in the past? I don't think I can recommend doing nothing, given that the employee contribution was communicated as a percent of premium. I'm thinking perhaps the easiest approach is a premium holiday if refunding to individual employees is not practical.

Any suggestions are appreciated.

card