Section 125 Premium Conversion Plan
This plan allows employees to pay for eligible benefits using either before-tax or after-tax dollars. Those who choose to participate will have their benefit premiums deducted from their salary before taxes are calculated. The net result for most employees is a reduction in their tax obligation. For detailed information, refer to the Section 125 Premium Conversion Plan.
Employees must meet the eligibility requirements specified in their Memorandum of Understanding (MOU), Exempt Compensation Plan, contract or salary ordinance. In order to be eligible for the pre-tax option, a dependent must be claimed on your Federal tax return and meet the eligibility requirements of a qualifying child or relative as described in Internal Revenue Code (IRC).
Failure to Elect
Election of before-tax and after-tax payroll deductions shall be made on the designated forms within Sixty (60) days of the initial eligibility period. Failure to timely submit appropriate paperwork will result in after-tax deductions for all eligible premiums for the remainder of the plan year or denial of the request.
Elections are Irrevocable
Plan elections are irrevocable for the remainder of the plan year unless you experience an Internal Revenue Service (IRS) Change in Status Event. No election change will be retroactive except as required under the Health Insurance Portability and Accountability Act (HIPAA) or other applicable laws or policies.