VCU faculty and staff who participate in COVA, Kaiser, and Optima health plans will not pay any premium for October health coverage. This “premium holiday” for state plan participants applies to the October 16 and November 1 pay dates.
What is the premium holiday?
The Commonwealth of Virginia state budget for 2019-2020 includes a premium holiday in October, 2019. This means that employee and employer health coverage premiums will not be collected for the month of October for the COVA Care, COVA HealthAware, COVA High Deductible, Kaiser Permanente, and Optima Health Vantage plans. The premium holiday does not apply to the TRICARE Supplement Plan because state law requires participants in that plan to pay the full cost of coverage.
When does the premium holiday occur?
The premium holiday will affect the October 16 and November 1 paychecks. Under normal
circumstances, half of the monthly premium for October health coverage would be collected on each of these paychecks. Because of the premium holiday, no October premiums will be collected from those paychecks.
Does this mean I will have no health coverage premium deduction on my October 16 and November 1 paychecks?
In most cases, yes. However, if you owe retroactive premiums for a previous month that are not yet paid, those unpaid premiums may still be deducted from paychecks during the premium holiday Also, as explained above, if you participate in the TRICARE Supplement Plan, you will remain responsible for the October premium and VCU will collect it from those paychecks.
What about if I make a retroactive change later? Do I still get the premium holiday?
In some cases, health coverage premium changes are retroactive. For example, when adding a newborn, premium changes are retroactive to the month the child was born even though the membership change may be requested up to 60 days later. Any portion of the retroactive premium adjustment that applies to the month of October will not be collected, except for the TRICARE Supplement Plan.
Are flexible spending accounts affected by the premium holiday?
Are any other benefit deductions affected?
Health coverage premiums are collected pre-tax. Since October health coverage premiums won’t be collected, the amount that would normally be deducted will be included in your take-home pay as taxable income. In most cases, your take home pay will go up on these paychecks, unless your tax withholding on the additional taxable income offsets or is larger than is being included in your check instead of being deducted for health coverage, or unless you have other deductions that offset the increase you realize by not paying for health coverage premiums on those checks.
How will this affect my take home pay?
Health coverage premiums are collected pre-tax thus lowering your tax liability and increasing your net pay. Since October health coverage premiums won’t be collected, the amount will be included in your pay as taxable income. In most cases, this could cause your take home pay to decrease on these paychecks as you may pay more in tax. Individual tax scenarios may vary.