East Greenwich School Dept. - Medical and Dental July 1, 2020

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.

COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.

COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.

Medicare Prescription Drug Notice

Dependent Health Coverage Tax Statement

NOTICEPursuant to Internal Revenue Service (IRS) laws and regulations, health and/or dental benefits that are paid by an employer for covered persons who are not the dependents of the employee or the employee is not able to claim deductions for the dependent for health and/or dental expenses as an itemized deduction per IRS Publication 502, then the fair market value of those benefits must be treated as taxable income to the employee. In simple terms, if your health and/or dental benefits cover someone who you do not claim a dependent on your tax return, you are legally obligated to declare the fair market value of the health and/or dental benefits as taxable income. For example, if your ex-spouse is receiving health and/or dental benefits from the East Greenwich School Department pursuant to a divorce decree, those benefits become a taxable event to you. East Greenwich School Department, in turn, is obligated to report that taxable income in your bi-weekly payroll check and also on your annual W-2 statement to the Internal Revenue Service. Or if you find in IRS publication 502 that you are not entitled to deduct medical expenses you paid for the dependent/non dependent as an itemized deduction on schedule A of your tax return, then you must pay payroll taxes on the fair market value of the health and/or dental for the dependent/non dependent. This taxable benefit is based on your dependent/non dependent situation for the calendar year 2019, and if applicable will be treated as taxable income to you on your first 2019 calendar year payroll check. It is important to note that you will be taxed at the fair market value of the health and/or dental plan as of 1/1/2019 for the non-dependents and the amount is subject to all state and federal income taxes and FICA and Medicare mandated withholding. The fair market values for Health, Healthmate Coast-to-Coast, Blue Solutions HSA or the Coinsurance / Dental benefits through 6/30/19 are as follows; our rates, if there is an increase, will be updated on 7/1/19 as part of the new plan year.