Yes, when the benefit is bona fide.
The Department of Labor looks for a written, legally enforceable plan communicated to employees in writing, with contributions made irrevocably to a trustee or other third party. You can also meet the fringe with equivalent cash, or a combination.
The short answer, then the detail.
How it works
- The plan is legally enforceable and in writing, and employees are told about it in writing.
- Contributions go irrevocably to a trustee or other third party and cannot revert to you.
- The obligation can be met with benefits, equivalent cash, or both.
What to watch
- A higher hourly wage does not satisfy the fringe.
- Unfunded, pay-as-incurred plans generally do not count, except paid vacation and holidays.
- Benefits and cash are recorded separately from wages.
What CFH does
- Reviews plan structure and documents against the bona fide test, alongside your counsel.
- Prices the plan for each covered employee.
- Documents how the plan is communicated.
General information, not legal advice. Your wage determination and contract clauses govern, and contracts counsel decides how they apply to you. We bring counsel in.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →