Purpose
The purpose of this bulletin is to provide agency instructions for processing the CUNY Health Benefits Buy Out Waiver Program.
Affected Employees
Eligible CUNY employees who elect to participate in the Health Benefits Buy Out Waiver Program are affected.
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 $1,000 for waiving family coverage or $500 for waiving individual coverage on a semi-annual basis. The maximum payment amount is $1,000; the payment must be prorated for any period less than 6 months.
Effective Date(s)
Institution Pay Period 20L/21C, paychecks dated 01/16/2020
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. To pay the Health Benefits Buy Out Payment to employees appearing on this list, University Payroll must submit the following information on the Time Entry Interface (NPAY502) or the Time Entry page using Earnings Code HBB.
| Earnings Begin Date: | Pay Period 20L/21C End date or the last date the employee was in pay status |
| Earnings End Date: | Same as the Earnings Begin Date |
| Earn Code: | HBB – HB Buyout |
| Amount: | The amount designated on the listing |
Errors and warning messages are communicated to the agency via Control-D report NPAY502 (Warning/Rejected Time Entry Transactions: Univ Management & Programs) and must be manually updated in PayServ as necessary.
Miscellaneous Payment Information
The Health Benefits Buy Out earnings are not pensionable.
Tax Information
The CUNY Health Benefits Buy Out Payment is supplemental taxable income, will be included in the employee’s taxable gross and is subject to all employment and income taxes.
Federal, State and New York City income tax withholding will be calculated using the Aggregate method. Yonkers income tax withholding will be calculated using the Flat Rate method (1.61135% for Yonkers residents and 0.50% for Yonkers non-residents).
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.