Can a fully-insured small employer offer different plans or make different contributions for different classes of employees?

This is a hard one because different federal and state laws as well as different carrier rules might come into plan.

HIPAA (1996) says that employers can offer different benefits/contributions as long as they treat similarly situated individuals the same and do not discriminate based on health status:

See question 19 from this FAQ on HIPAA:

https://www.dol.gov/sites/dolgov/files/EBSA/about-ebsa/our-activities/resource-center/faqs/hipaa-compliance.pdf

Here’s info from the DOL (see page 68):

https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/compliance-assistance-guide.pdf

Here’s a SHRM article about it:

https://www.shrm.org/topics-tools/tools/hr-answers/employers-allowed-to-offer-different-benefits-to-different-employees-to-charge-benefit-discriminatory-practice

 

But the ACA modifies IRC section 105 to say that fully-insured plans cannot contribute in favor of highly compensated employees (even with no 125 plan in place), and there’s a big fine for doing so:

Section 105: Health Plan Nondiscrimination Rules

Here’s section 105 of the tax code:

https://www.law.cornell.edu/uscode/text/26/105

This article from Leavitt provides some detail about discriminatino in favor of HCEs if there is a 125 plan in place:

Can Employers Provide “Better” Benefits for Managers?