Purpose

To provide agency instructions for processing the CUNY Health Benefits Buy Out Payment.

Affected Employees

Eligible CUNY employees who elect to participate in the Health Benefits Buy Out Waiver Program

Effective Date(s)

Institution Pay Period 20L/21C, paychecks dated 1/24/13

Background

The Health Benefits Buy Out Waiver Program is authorized under IRC Section 125 and administered under the Medical Spending Conversion (MSC) Program. Employees receive an annual incentive payment in exchange for waiving their City health benefits when other non-City group coverage is available. The employee must complete the Health Benefits Application and the MSC Enrollment/Change Form. An employee will receive $500 for waiving family coverage or $250 for waiving individual coverage on a semi-annual basis. The maximum payment amount is $500; the payment must be prorated for any period less than 6 months.

Agency Actions

A listing of employees who elect to participate in the Health Benefits Buy Out Waiver Program is sent to CUNY Central Office by the Deputy Director of the NYC Management Benefits Fund, Tax-Favored Benefits and Citywide Programs. CUNY submits payment for these employees on the Time Entry Interface (NPAY502) using the following information:

Errors and warning messages are communicated to the agency via Control-D report NPAY502 and must be manually updated in PayServ as necessary.

Tax Information

The CUNY Health Benefits Buy Out Payment is taxable income, will be included in the employee’s taxable gross wages, and is subject to all employment and income taxes.

Payroll Register and Employee’s Paycheck/Advice

The Earnings Code HBB and the amount paid will be displayed on the Payroll Register. The Earnings Description HB Buyout and the amount paid will appear on the employee’s paycheck stub or direct deposit advice.

Questions

Questions regarding this bulletin may be directed to the Payroll Earnings mailbox.