Legal Question in Administrative Law in California

Re: Health Care Benefits

Unless you have a union type contract in place, I believe an employer can institute such a program. An employer can give an employee benefits and deny another. Call to discuss 800-685-6950

Re: Health Care Benefits

I want to start out by saying that I do not know the answer to this question for sure, so if you are an employer thinking of instituting a plan like this, you'd better not rely on my answer.

On the other hand, if you are an employee whose employer has such a plan, I still don't know for sure, but I think the following may be helpful.

I have skimmed through a handbook on employment law for new employers. It covers the basics of fringe-benefit law. I gather the impression that health-care contributions stated as a percentage of earnings would be an acceptable concept in a voluntary plan, such as a cafeteria plan, where the employee has options, or may decline to participate.

There is the further issue of what do you mean by "can" the employer do it. Sometimes employers are legally permitted to do something, but they lose the tax deductibility of their contributions, or suffer some other detriment. Therefore, some fringe-benefit plans that may be permissible in a legal sense are dumb because the employer or the employee loses tax benefits that would be available if the plan were designed with more thought.

Tax laws and ERISA make health-benefit law very complex. I think this concept would be OK for a voluntary plan, but only someone more expert than I could tell you for sure (1) if it's legal in the first place or (2) a smart way to design a health plan.