Can an employer withhold my health insurance premiums under Section 125 without informing me about it and having me sign a Salary Reduction Agreement? Thank you for your reply.

Technically, no. The salary reduction agreement is an agreement between you (the employee) and your employer. For the "Salary Reduction Agreement" to be valid, you must agree to it. Did you sign anything electing to participate in a Plan? If so, that was likely a Salary Reduction Agreement..

Thank you, Rick. No, I didn't sign anything, nor was I ever presented with an enrollment proposal. As a matter of fact, I didn't know what Section 125 until a few days ago. I am currently suing my employer in small claims court for reneging on his promise to cover my health insurance at 100%, the fact which I discovered after 2.5 years of my employment. My employer never provided me with pay stubs (it's a very small business with archaic bookkeeping practices), there were no pretax deductions reflected on my W2 forms and nothing to alert me to the fact that I was paying for my own insurance. His attorney's main defense is that I accepted this arrangement for 2.5 years, therefore the claim should be dismissed. My defense is that I never requested Section 125, nor signed for it. Hence my question to you--can it be done legally without my consent? Also, I found information on the internet that such contract/agreement has to be renewed every year. Is that so?

Oops, sorry, Rick. I should've hit "reply" instead of "Post as a Guest".

Renee, you should consult counsel on these legal issues. These comments should not be taken as legal or tax advice.

<<can be="" consent?="" done="" it="" legally="" my="" without="">> According to the Section 125 IRS code, an employee must agree (i.e. consent) to the Salary Reduction Agreement. See www.irs.gov for more information.

<<also, agreement="" be="" contract="" every="" found="" has="" i="" information="" internet="" is="" on="" renewed="" so?="" such="" that="" the="" to="" year.="">> According to the Section 125 IRS code, an employee's initial "Salary Reduction Agreement" can be renewed automatically (each year) if the employee does not notify their employer to terminate your election. The company's Section 125 "Plan Document" sets the rules for annual renewals.</also,></can>

I fully understand that the comments are not to be taken as legal or tax advice and I do intend to consult counsel. I do, however, appreciate the information you have provided to me as it gives me the reason to pursue it further. Thank you again for your "informal" and non-binding answer to my question. :-)

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Can you tell me the required time to retain "Salary Reduction" payroll authorization forms.

Darenthy - It depends on how your POP plan is set up. Typically, it is during the open enrollment time frame.