Transcript Slide 1

DePaul University 2008
Second Domiciled Adult
Benefits
Second Domiciled Adult Coverage at
DePaul University - History
- Pre-2005: On-going conversation between faculty
members and university administration regarding the
expansion of health benefits to domestic partners
- 2005: President makes expanded medical coverage for
uninsured members of employee’s households a priority
– 2006: Faculty / staff survey finds widespread desire for
the university to expand benefits to domestic partners
– 2007: DePaul implements Second Domiciled Adult
medical coverage with broad eligibility rules
– 2008: 43 unrelated SDAs, 16 related SDAs and 4 SDA
children covered by DePaul’s medical plans
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DePaul Group Benefits Plans that Cover
Spouses and Children
SDA
Coverage
Medical
Dental
Vision
Supplemental Life Insurance
Employee Assistance Program
Tuition Waiver
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Medical Benefit Plan Eligibility Rules
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Spouses of Eligible Employees
– person of the opposite sex to whom the employee is legally married
under federal law.
Dependent Children of Eligible Employees (Applicable to Health Plans)
– unmarried;
– under the age of 23 (coverage continues to the end of the month in
which age 23 is reached);
– the employee’s natural born, adopted or placed for adoption
(placed permanently with the employee for adoption) child,
stepchild, or a child for whom the employee is the court-appointed
legal guardian, or the employee’s disabled child of any age; and
– meet the IRS criteria for tax-favored health benefits - generally a
child must meet the IRS qualifying relative or qualifying child rules
under Section 152 (without the income limitation).
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Medical Benefit Plan Eligibility Rules
Medical benefits can be extended to an SDA if the employee
is not covering a spouse under the DePaul medical plan
An SDA of a covered employee can be either:
– a Related Second Domiciled Adult; or
– an Unrelated Second Domiciled Adult (additional tax considerations)
Note: Eligible children of covered SDAs may also be enrolled
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Eligible Related Second Domiciled Adult
An adult member of the employee’s household who meet
all of the following criteria:
– is the employee’s relative including parent, son, daughter, grandchild,
great grandchild, grandparent, great grandparent, brother, sister, halfbrother, half-sister, uncle, nephew, niece, mother-in-law, father-in-law,
step-parent, step-children;
– is at least 18 years of age prior to the effective date of the coverage;
– has shared the employee’s principal residence at least 6 months prior to
the effective date of the coverage;
– does not have other group health insurance;
– is not eligible for Medicare or Medicaid; and
– meets the criteria for tax-favored health benefits under the Internal
Revenue Code.
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Eligible Unrelated Second Domiciled Adult
An adult of the same or opposite sex of the employee who meet
all of the following criteria:
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is not related to the employee in any way that would prohibit marriage;
is not legally married to any person;
is at least 18 years of age prior to the effective date of the coverage;
has shared the employee’s principal residence at least 6 months prior to
the effective date of the coverage;
has a close personal relationship with the employee (not a casual
roommate or tenant) that is intended to be permanent;
shares with the employee a mutual obligation of support and
responsibility for each other’s welfare;
does not have other group health insurance; and
is not eligible for Medicare or Medicaid.
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Eligible Children of Second Domiciled Adults
The child of an covered SDA who meets all of the following
requirements:
– Is unmarried;
– Is under age 23 (coverage continues to the end of the month in
which age 23 is reached);
– Is the SDA’s natural born, adopted or placed for adoption
(meaning placed permanently with the SDA for adoption) child,
stepchild, or a child for whom the SDA is the court-appointed
legal guardian, or the SDA’s disabled child of any age;
– Has the same principal place of residence as the employee for
more than six months of the year (temporary absences, such as
for school, are treated as time at the same principal place of
residence); and
– Receives more than one-half of his or her support from the SDA
or the employee.
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Resources to Help You Determine Who Is Eligible:
• Benefits Overview and How to Enroll Document
• Summary Plan Descriptions (see the General
Information Section of the Health Plans SPD)
Both of these resources can be found on the Benefits
Enrollment Page of the HR web-site at
https://hr.depaul.edu
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WHEN AN ELIGIBLE SDA CAN BE ADDED
An employee may elect coverage for an eligible SDA during
annual enrollment or within 31 days of one of the following
events:
– The employee and eligible SDA meet the 6 month cohabitation
requirement;
– The eligible SDA loses other group coverage due to change in
employment, work site or income; or
– The employee meets the 6 month waiting period for enrolling a
new Unrelated SDA after having previously dropped coverage
for an Unrelated SDA due to death or termination of the
relationship.
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Medical Plan Enrollment of SDAs During
Annual Enrollment
1.
Enroll yourself and your eligible children using the on-line
Benefits Enrollment tool;
2.
Contact the Benefits Helpline (x28232) to receive the Second
Domiciled Adult Affidavit of Eligibility form;
3.
Complete the affidavit, sign it, and submit it to HR along with
appropriate documentation within 31 days of employment date;
4.
Also submit a Declaration of Tax Status form if your Unrelated
SDA or children of your Unrelated or Related SDA is eligible for
tax-favored health benefits (otherwise SDA coverage has
significant tax consequences).
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Medical Plan Enrollment of SDAs Not During
Annual Enrollment
Within 31 days of Meeting the Eligibility Requirements...
• Complete the “Second Domiciled Adult: Affidavit of Eligibility” and
• Submit the Affidavit to HR along with 2 recent documents showing
that your SDA’s current address is the same as yours.
• Submit the “Declaration of Tax Status” form to avoid additional
taxation if your Unrelated SDA or children of your SDA qualify for
tax-favored coverage.
Your SDA and children of your SDA (as applicable) will automatically be
enrolled in the same medical plan as you.
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Taxation of Second Domiciled Adult Benefits
Enrolling an Unrelated SDA or children of a Related or Unrelated SDA
who do not meet the IRS criteria for tax-favored health benefits will
result in...
– Imputed income to the employee for the employer portion of the
premium, and
– After-tax employee premiums for the SDA portion of the coverage.
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Taxation of Second Domiciled Adult Benefits
Criteria for Tax Favored Health Benefits:
An Unrelated SDA is eligible for tax-favored health coverage only if
all the following requirements are met:
– The SDA lives with the employee (shares a principal residence)
for the full tax year, except for temporary reasons such as
vacation, military service, or education;
– He or she is a citizen or legal resident of the United States;
– He or she isn’t anyone’s Section 152 qualifying child dependent;
and
– He or she receives more than half of his or her support from the
employee.
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Taxation of Second Domiciled Adult Benefits
A child of an SDA qualifies for tax-favored benefits if he or she
meets the IRS requirements for tax favored health benefits. The
child must be an IRS...
– Qualifying Child,
– Qualifying Relative (without the income restriction)
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Taxation of Second Domiciled Adult Benefits
– Coverage for a Related SDA will automatically be on a
tax-favored basis: Pre-tax contributions for the
coverage of the related SDA and no imputed income;
– Coverage for an Unrelated SDA and children of all
SDAs will automatically be on a taxable basis unless
the employee returns a completed Declaration of Tax
Status; and
– Tax status changes will be made on a prospective
basis only.
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Taxation of Second Domiciled Adult Benefits
For those SDAs and children of SDAs who are not eligible for taxfavored health coverage, DePaul will:
– Establish the fair market value of the health coverage;
– Include this amount (less any after-tax employee contributions)
in the employee’s income when determining income and payroll
taxes;
– Report the income on W-2s; and
– Deduct employee contributions for the unrelated SDA and/or
SDA’s children on an after-tax basis.
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Taxation of Unrelated Second Domiciled Adult
Benefits: PPO Premiums and Imputed Income
After-tax
Deduction
Total
Monthly
Premium
(EE + ER)
Imputed Portion
192.94
N/A
964.68
N/A
192.94
89.70
103.24
964.68
412.92
EE + Family
263.08
263.08
N/A
1,315.40
N/A
EE + SDA +
SDA Children
263.08
89.70
173.38
1,315.40
693.50
EE + Children
+ SDA + SDA
Children
358.85
185.47
173.38
1,794.21
693.50
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Total Employee
Monthly
Deduction
Pre-tax
Deduction
EE + Spouse
192.94
EE + SDA
When SDA Coverage Ends
An employee may drop coverage for an SDA only during
open enrollment or within 31 days of one of the following
events:
• The SDA ceases to meet the eligibility criteria
• The SDA enrolls in other group coverage
• The SDA becomes eligible for Medicare or
Medicaid
• The SDA dies
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SDA Coverage Continuation in the Event the Employee Loses Benefits
Qualifying Event
Maximum Continuation Period
for a Second Domiciled Adult
The employee loses coverage because of reduced work
hours or takes unpaid leave other than under the Family
Medical Leave Act
18 months
Employee’s employment terminates for any reason
except gross misconduct
18 months
The employee is disabled — as defined by the Social
Security Act — at the time of a COBRA qualifying event
or at any time during the first 60 days of COBRA or
COBRA Coverage Equivalent
29 months
Only the employee may elect Continuation of Coverage for an SDA and must pay
the full premium for continuation of coverage.
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SDA Retiree Medical Eligibility
• If an active employee retires and they are covering an
SDA at the time of retirement, the SDA may continue to
be covered as long as they meet the Plan’s eligibility
requirements.
• Once an SDA becomes eligible for Medicare, he or she
is no longer eligible for SDA medical benefits.
• The retiree must pay the full cost of the SDA’s coverage
regardless of the employee’s grandfather status under
the terms of the retiree medical plan.
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To Learn More About Your Plans*
Read the Summary Plan Descriptions...
DePaul University Health Plans (Medical, Dental, and Vision)
– General Information Section (eligibility, coverage begin and
end dates)
– Administrative Section (Claims Filing, Appeals, ERISA and
COBRA)
– Medical Plans Details, Dental Plan Details, and Vision Plan
Details
DePaul University 403(b) Retirement Plan
DePaul University Group Life Insurance;
DePaul University Group Total Disability Insurance; and
DePaul University Flexible Spending Program
The SPDs can be found on the HR website at https://hr.depaul.edu.
*The SPDs are in printable .pdf format. If you require a printed version of
any SPD and are unable to print them you may request a printed
copy by contacting the Benefits help line at 28232.
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