Employer wants to limit cash benefit available to employee who has medical coverage through a spouse's employer's plan. If monthly budget is $150, and cost of individual group medical coverage is $100, plan would give $50 to employee who selects the coverage, but only a percentage of the cash benefit that would otherwise be available to the employee who foregoes coverage because he/she is covered under a spouse's plan.

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You could create a two tier credit strategy. One credit, in this case $100, could only be used for the purchase of employer sponsored health insurance. The second credit of $50 could be used for any eligible expense under the Section 125 plan or even be taken in cash as taxable income.I hope I understood your question properly.

Christine:

We have this type of two-tier system as well. For our Flexible Spending Account, we provide $3000/yr to employees who elect medical coverage through our benefit plan. If medical coverage is waived, we provide $1710/yr to the employee. The employee who has waived medical coverage may elect dental or vision coverage or use their FSA funds for medical or dependent care reimbursement.



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Good Luck!!!
Sheila K 8^)