I work for a government contractor who until recently paid for all employee life insurance benefits. We have just been told that there is mandatory participation in the life insurance plan.

Can an employer force an employee to participate and have premiums taken out of their pay?

Benefits and pay are conditions of employment which are agreed to by the employer and employee and can be changed at any time if there is no written contract. The employee is free to accept the change in the conditions of employment or resign.

A few concerns about mandating a voluntary benefit:

Many state laws require an employee to consent to most deductions from their paycheck. While many practioners will rely on ERISA pre-emption, I generally recommend that an employer obtain the consents.

If an employee did not have a choice about the coverage, did they really have a choice between cash and the benefit? If they had no choice, arguably the premiums are taxable compensation.

If the employer really wants to mandate coverage, why run it through the 125 plan and take out payroll deductions -- instead just don't provide the expected raise and add the mandatory coverage with the employer paying the full premium.

Most states prohibit the taking out of life insurance on a person without their knowledge and consent and some even require a signature.

Even more prohibited if there is a salary reduction needed.

Do a Google search on "janitor insurance" and "dead peasant insurance" and you shoul see much on the subjcet including lawsuits against and by companies like Wal-Mart, American Heritage and a number of other Fortune 500 companies.

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After posting I realized that you said that this was a Goverment Contractor. If so then DBRA should come into play. From my recollection the employer can make it mandatory if the program meets the DoL requiremenst that this be (using their terminology" a "bona fide" benefit. I do not recall life insurance as being acceptable. In any case, the employee must be notified and since state law regarding insurance applies, the employee's consent and signature should be needed.

By the way, Who is the beneficiary? What type of Life Insurance?