Open Enrollment Newsletter
Click here for the Open Enrollment Newsletter.
Medical, Dental & Vision - Rates
There are no rate changes for 2012.
Medical, Dental & Vision - Plan Design
There are no plan changes for 2012.
Sponsored Dependents
Effective January 1, 2012, employees will be able to add eligible sponsored adult and sponsored child dependent(s) to their benefit plans. If you wish to take advantage of this new eligibility class for 2012, you must contact the HR Service Center during the open enrollment period. Adding a sponsored dependent has important tax implications to consider.
Tax Implications of Sponsored Dependents
Adding a sponsored dependent has significant tax implications to consider. Employees pay their premiums on employer-provided group medical, dental and vision insurance plans with “pre-tax” deductions. However, the IRS requires that the fair market value of the benefits provided for a person who is not the employee’s dependent for federal income tax purposes, is considered a taxable employer provided benefit to the employee. This added employer provided benefit is called imputed income and is subject to all applicable taxes. Imputed income will apply to medical, dental, vision and educational benefits provided for sponsored dependents.
Medical, Dental & Vision: The following are examples showing the amount of the pre-tax deduction and imputed income when adding sponsored dependents to the medical, dental, and/or vision insurance plans.
Example #1: Employee and One Sponsored Dependent
Example #2: Employee and Two Sponsored Dependents
Example #3: Employee and Three or More Sponsored Dependents
Educational Benefit: The full value of the educational benefit provided for Sponsored Dependents will also be imputed income and subject to applicable taxes. For example: A sponsored dependent taking three hours of undergraduate classes might have $1370 due in tuition. The educational benefit is 50% of tuition, so there would be $685 of imputed income.
If your sponsored dependent(s) qualifies as your dependent as defined by IRS (found under §Section 152 of the Tax Code), the imputed income may not apply. If this is the case, please click here for the Tax Status Declaration Form. This is not intended as tax advice but rather to alert employees of potential tax consequences.
Benefits Eligibility Requirements
General definitions of eligible dependents are given below. For further details on Sponsored Dependent eligibility, please click here to review the policy.
- Spouse – Lawful spouse (includes common-law spouse in the State of Alabama)
- Dependent Child – Child (up to age 26) of the employee or employee’s lawful spouse to include the following:
- Biological child
- Step child
- Legally adopted child (including a child placed for adoption)
- Child in the permanent legal custody of employee or spouse
- Incapacitated child (Age 26 or more, unmarried, and was permanently incapacitated before age 26, is not able to support him or herself and depends on the UA employee for his/her support due to this incapacitation.
- Sponsored Adult Dependent
- Shares primary residence (not as a renter, tenant or employee) with the covered UA employee, and has lived with UA employee for at least the twelve consecutive months immediately prior to effective date of coverage
- Is at least age 19 (age of majority in AL)
- Is not a relative of the employee
- Is not married and was not married during the period of shared residence
- Sponsored Child Dependent – Child (up to age 26) of the Sponsored Adult Dependent to include the following:
- Biological child
- Legally adopted child (including a child placed for adoption)
- Child in the permanent legal custody of the Sponsored Adult Dependent
- Incapacitated child (Age 26 or more, unmarried, and was permanently incapacitated before age 26, is not able to support him or herself and depends on the UA employee and/or the Sponsored Adult Dependent for his/her support due to this incapacitation.)
Dependent Documentation Requirements
The following documentation must be presented to the HR Service Center when adding a dependent.
1. Spouse
- A copy of your marriage certificate or a signed affidavit of common law marriage AND
- Documentation dated within the last 6 months confirming a current relationship status or establishing current joint residency (e.g., tax documents, joint household bill, joint bank/credit account, joint mortgage or lease) **You may blacken out any financial information.**
2. Dependent Children
- Biological or Legally Adopted
- A copy of the child’s birth certificate, naming you or your spouse as the child’s parent, OR appropriate court order granting permanent legal custody/adoption decree naming you or your spouse as the child’s legal guardian.
- Stepchild
- A copy of the child’s birth certificate, naming your spouse as the child’s parent AND a copy of your marriage certificate as proof of the spouse's relationship to the employee OR
- A copy of the child’s birth certificate, naming your spouse as the child’s parent AND a signed affidavit of common law marriage document as proof of the dependent's relationship to the employee.
- Incapacitated Child
- A copy of the child’s birth certificate, naming you or your spouse as the child’s parent, OR an appropriate court order granting permanent legal custody/adoption decree naming you or your spouse as the child's legal guardian. Note: If this incapacitated dependent is a stepchild, the documentation listed above for stepchildren will also be required.
3. Sponsored Adult Dependent
- A copy of the dependent's birth certificate or driver's license AND
- One form of documentation dated on or before November 15, 2010, establishing a common residence for the past 12 months, AND
- One form of documentation dated since May 15, 2011, establishing a common residence
- Affidavit of Sponsored Dependent Eligibility
4. Sponsored Child Dependents
- Biological or Legally Adopted Child
- A copy of the child’s birth certificate, naming your sponsored adult dependent as the child’s parent OR an appropriate court order/adoption decree naming your sponsored adult dependent as the child's legal guardian.
- Affidavit of Sponsored Dependent Eligibility
- Incapacitated Child
- A copy of the child’s birth certificate, naming your sponsored adult dependent as the child’s parent, OR an appropriate court order granting permanent legal custody/adoption decree naming your sponsored dependent as the child's legal guardian.
- Affidavit of Sponsored Dependent Eligibility
Flexible Spending Account Brochure
Please click here to learn more about the Healthcare and Dependent Care Flexible Spending Accounts.
Flexible Spending Account Enrollment Instructions
Click here for the enrollment instructions. This enrollment link will be available from November 1, 2011, through November 15, 2011.
Flexible Spending Account Card
The FSA FlexCard enables you to access your Healthcare Flexible Spending Account funds (dollars) at the point of sale, therefore, eliminating the requirement to request a reimbursement from your flexible spending account manually. When you use your FlexCard to purchase eligible healthcare expenses, please be sure to save your receipts in the event you are requested to verify the eligibility of your purchase. You will be able to utilize your FlexCard to purchase doctors' copayments, dental and vision expenses, prescription drug expenses and many other flex approved items. The maximum annual amount you can contribute to a healthcare account in 2012 is $8,000. (NOTE: Beginning in 2013, contributions to the Healthcare FSA will be limited to $2,500.)
Participants in the Dependent Care Flexible Spending Account can use their Flexcard to pay for child care, elder care, etc. at point-of-sale, or can continue to submit a paper claim form with a receipt to Flexcorp. The maximum annual amount you can contribute to a dependent care account is $5,000 or $2,500 for married taxpayers filing separate returns.
Using the Flexible Spending Accounts (FSA), hundreds of UA employees save thousands of dollars every year. If you have not used this benefit, this may be the year to start. Participants save taxes by using FSA money to pay eligible healthcare and dependent care expenses. It’s like getting a discount of up to 30% or more on these purchases. Look for the FSA Newsletter to find out if the FSA Plan is right for you!
Please Note: Current FlexCard participants who elect to participate in the FSA should retain their current card. The 2012 election amounts will be loaded automatically onto the card.
Click here for the Open Enrollment Form to make changes to your medical, dental and vision plans. This form will be available from November 1, 2011, through November 15, 2011. Any changes made will be effective January 1, 2012.