Are there any state or federal restrictions on varying benefits between employee classes?

Yes. Employers can design different benefit offerings for distinct employee groups, such as full-time versus part-time or salaried versus hourly, but there are important federal and state rules that determine when and how those differences are allowed.

‍

Federal law allows class-based benefit differences, with limits
Employers may tailor benefits by bona fide employment class such as full-time, part-time, union, or location. These classes must be based on legitimate business reasons and never on protected characteristics like age, gender, or health status.

• Best practice: Keep distinctions objective and well-documented, such as linking them to cost, job type, or turnover rate.

ERISA requires fairness and consistency
Under the Employee Retirement Income Security Act (ERISA), eligibility and benefit rules must be applied consistently within each class and clearly described in the Summary Plan Description (SPD).

• Translation: You can vary benefits between classes, but everyone within the same class must receive the same coverage.

The ACA sets standards for large employers
Applicable Large Employers (those with 50 or more full-time employees) must:

• Offer Minimum Essential Coverage (MEC) to at least 95 percent of employees working 30 or more hours per week and their dependents.
• Ensure that coverage for full-time employees is affordable and meets Minimum Value (MV) standards.

You may offer different coverage tiers or contribution levels for part-time or variable-hour employees, but full-time employees must always receive ACA-compliant coverage.

ICHRA plans follow class-based contribution rules
Individual Coverage Health Reimbursement Arrangements (ICHRAs) can vary by employee class, such as full-time versus part-time, salaried versus hourly, or by location. However, the IRS enforces minimum class size requirements (typically 10 to 20 employees, depending on workforce size) and requires consistent contributions within each class.

• Best practice: Define classes carefully, apply equal reimbursement rules within each class, and document your contribution logic.

Nondiscrimination rules apply to self-funded and insured plans

• Self-funded plans: Must comply with IRS Section 105(h), which prohibits favoring highly compensated employees in either eligibility or benefits.
• Fully insured plans: Are subject to ACA nondiscrimination standards (though enforcement is currently delayed). Even so, fairness and consistency remain best practice.
  Bottom line: Avoid designing richer benefits that disproportionately favor executives or management.
  
  

Check state-specific rules
Some states, including California, New York, and Massachusetts, have stricter benefit equality laws covering dependent eligibility, gender parity, and family status protections. Always review state requirements when designing multi-location or ICHRA-based plans.

‍

Vitable’s flexible, primary-care-first model integrates easily with any class-based benefits structure. Whether for full-time, part-time, or seasonal staff, every member receives $0 access to primary care, mental health support, and prescriptions. This approach helps employers maintain compliance while offering equitable, high-value care across all employee groups.

‍

You can vary benefits across legitimate employment classes, but never by protected characteristics. Apply benefits consistently within each class, ensure all full-time employees receive ACA-compliant coverage, and remain aware of federal and state nondiscrimination rules. With Vitable, you can maintain compliance while extending meaningful, affordable care to every part of your workforce.

‍