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Too Much Employee Contribution?


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I have encountered a situation where the medical premium for an employee is $800/mo ($9600/yr), but his bi-weekly withholding is $220 (or $5720/yr.).  In other words, employee is paying nearly 60% of the cost.

Perhaps not as rare as you may think.  Some employers don't want to pay anything - believe employees should tote the entire bag.

I have heard from other people that the employer may not recover more than 50% of the total premium.  My information comes from a couple of comrades in the industry, but I don't know where the cite exists.  Perhaps it is part of Obamacare, perhaps part of section 125 - dunno.

Any discussion?

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I know of no such limitation.  Health insurance is a form of fringe benefit.  In this regard, look at FAR 31.205-6(m).  However, under the SCA an employer is required to provide employees not less than the fringe benefits stated in the applicable WD.  This scenario raises the question as to whether the contractor is fulfilling this obligation if it has SCA covered contracts.

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