In the event of a disaster that would disable normal processing, this guarantee will be placed on hold until normal activities can resume. Although most employees will be better off with tax free premiums, there may be a few individuals who will want to pay taxes on their medical or dental insurance premiums. You may wish to decline the tax free treatment if you plan to cancel your state medical or dental insurance coverage during the year for a reason other than a change in your family status. To pay your state group insurance premiums on a taxable basis, you will need to indicate this on a Flexible Benefits Plan Election Form. Fill out the waiver and return the form to your personnel officer during open enrollment, or within 30 days of your employment date.
Less taxes means more spendable income.
Unlike other salary reduction plans, such as deferred compensation, the Flexible Benefits Plan frees income taxes on these amounts forever rather than just delaying the tax liability. The following chart gives an example of how the program could work to increase your spendable income by saving taxes. Each pay period, all eligible tax-free deductions are taken out of your pay check before federal and social security taxes are calculated. After all tax-free deductions have been made, federal and social security taxes are calculated on the reduced amount. Any other taxable payroll deduction amounts are then taken out of your paycheck.