Have a Tax Question? Ask a Tax Expert
Hello JA Customer,
You are never under any obligation to participate in your employer's health plan if you do not want to, regardless of whether or not it is a pre tax or after tax plan. All that pre tax plans mean is that your premiums are not included in your taxable income. But you are certainly not under any obligation to carry the insurance. That is a fringe benefit offered by most employers, but it does not mean you are required to participate.
Obviously the person at your company that you spoke to is not at all familiar with the rules and I would suggest you talk to someone else in your Personnel Dept.
Thank you JA Customer
Hello again JA Customer,
No, there is really no form or document that covers this situation. It is simply a well known fact that you are never obligated to carry the health insurance that your employer offers. If there were some documentation that I could point you to I would be happy to do so, but this is just something I have never heard of an employer even telling to their employees.
The IRS states this about a 125 Cafeteria Plan, which is pre tax health plan:
A cafeteria plan is a separate written plan maintained by an employer for employees that meets the specific requirements of and regulations of section 125 of the Internal Revenue Code. It provides participants an opportunity to receive certain benefits on a pretax basis. Participants in a cafeteria plan must be permitted to choose among at least one taxable benefit (such as cash) and one qualified benefit.
Nowhere in the IRS rules does it state that an employee must take this coverage. It only says that the employer must provide you the opportunity to do so.
Surely someone in your personnel department must be familiar with these rules. A company cannot force you to carry the health insurance they offer. There are hundreds of reasons that an employee might not want or need that coverage. They may have their own insurance at a better rate or their own insurance with better coverage. They simply cannot force you to carry this insurance.
If your employer is requiring that you keep this insurance, it certainly has absolutely nothing to do with the fact that it is a pre-tax plan, so I would ask them to provide you a better explanation.