Purpose:
The purpose of this bulletin is to provide the City University of New York instructions for processing the CUNY Health Benefits Buy-Out Waiver Program.
Affected Employees:
All employees of the City University of New York who are eligible 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 is $1,000; the payment must be prorated for any period less than 6 months.
Effective Dates:
Effective Institution Pay Period 19L/20C, paychecks dated 01/09/2025.
Agency Actions:
A listing of employees who elect to participate in the Health Benefits Buy-Out Waiver Program is sent to the 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, agencies must submit the following information on the Time Entry Interface (NPAY502) or the Time Entry page using Earnings Code HBB – HB Buyout:
| Earnings Begin Date: | Pay Period 19L/20C 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 wages, 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 (1.95975% 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.
Undeliverable Checks:
When a valid payroll check is undeliverable due to the agency’s inability to locate the employee, the agency should follow the Agency Actions identified in Payroll Bulletin No. 1786, Non-Negotiated and/or Undeliverable New York State Payroll Checks.
Checks issued to eligible employees who are now deceased should be returned with a completed Next of Kin Affidavit (Form AC 934-P), original death certificate and a Report of Check Exchange (Form AC 1476-P). If a Next of Kin Affidavit has been previously submitted for a deceased employee’s payroll check, OSC will accept a photocopy of this form along with a new Report of Check Exchange.
Questions:
Questions regarding this bulletin may be directed to the Payroll Earnings mailbox.