Employee premiums as percent of pay

[kmhaab]

Has anyone seen a situation where employees' health insurance premiums are set as a percentage of the employee's wages on an ongoing basis - and wages can vary weekly resulting in a different premium cost every week (or month)?

I'm familiar with using a percent of pay at a given point in time to set a premium for the year, but not with using a percent on an ongoing basis with employees with variable pay.

I cannot find anything prohibiting this practice, although I can see lots of complications.

Any and all thoughts appreciated!

[Flyboyjohn]

There is nothing prohibiting the practice but as you indicate it is highly problematic from a practical standpoint.

A more common and somewhat easier structure is to say "the employee pays $300/month except where the $300 exceeds 9.66% of compensation in which case it becomes 9.66%"

[Peter Gulia]

Am I right in recalling that the limit on whether a participant contribution is an affordable portion of the employee/participant's pay refers to the amount required to get self-only coverage?

If a participant chooses a self-plus-one or "family" coverage, how do the communications explain the formula for the limit on the participant contribution (recognizing that the limit's amount can vary according to wages and coverage choices)?

[Bill Presson]

Am I right in recalling that the limit on whether a participant contribution is an affordable portion of the employee/participant's pay refers to the amount required to get self-only coverage?

Correct. And a penalty still isn't triggered unless the person chooses to go to the marketplace and get a subsidized plan instead.