Each year our small business gives raises. Some people elect to have a greater portion of their insurance premiums paid by the company instead of directly to them. Is it legal for a company to pay 75% of one employees medical and 95% of anothers?

While it is allowed to have a two tiered plan, it must meet the nondiscrimination rules of Regs 1.105. The other problems that I see are (1) the timing of the employees election (2)the eligibility of any "dependents" (3)the establishment of a formal plan, which for 105 does not have to be written but for ERISA must be.