For the second year in a row, many University of Nebraska employees will benefit from a “premium holiday” in December.
In a Dec. 4 message to staff and faculty to the four NU campuses, David Lechner, NU senior vice president for business and finance, said the measure is the result of another successful year with lower-than-projected health claims.
To take advantage, university employees enrolled in either or both of the university’s medical and dental plans will not pay premiums for December.
“Action is not required on your part,” Lechner wrote to employees in the email. “The medical and/or dental premiums that normally would be deducted will automatically be retained in your December paycheck.”
Total savings for December will depend on in which plan employees are enrolled, he said. Gross savings will range from $146 before taxes for a Basic Option Employee Only plan to $307 before taxes for a Basic Option Family plan.
“We’re very pleased to be able to provide this one-time benefit to our employees — our greatest asset,” Lechner said.
Those on vision care insurance will continue to pay premiums in December. UNL employees with questions about the “premium holiday” can contact Campus Benefits at 402-472-2600.
FAQs
Who is eligible for the premium holiday?
All active employees enrolled in the university’s medical and/or dental insurance plans.
When is the premium holiday?
Employees will not pay medical or dental insurance premiums during the month of December 2014. For monthly paid employees, this will be reflected on the Dec. 31 paycheck. For bi-weekly paid employees, this will be reflected on the Dec. 11 and 24 paychecks.
Do I need to do anything to participate in the premium holiday?
No. The medical and/or dental premiums that you pay monthly will automatically be retained in your December pay.
What is the impact on my taxable income?
The health insurance premiums paid by employees are a reduction to taxable gross income. Given that employees will not pay premiums in December, taxable gross income will go up by an amount that is equal to the premium holiday savings. Per IRS regulations, this is taxable income. The university payroll system will automatically calculate and withhold tax withholdings, so no action will be required on the part of employees.
What if I am paid over nine months?
Employees paid over nine months pay annual health insurance premiums over nine months. Given that the premium holiday is for one month only, nine month employees will still have a health insurance premium contribution reflected on December paycheck. However, the contribution will be reduced by an amount equal to one month of premiums. In short, nine-month employees will receive the same benefit as those paid over 12 months.
Does the premium holiday apply to vision insurance premiums?
No. The holiday only applies to medical and dental premiums. Employees enrolled in vision care insurance will continue to pay that premium in December.
Instead of offering a premium holiday, could the university put savings achieved by the health plan toward another use, like faculty salaries or a new building?
No. Funds in the health plan trust are utilized for health care purposes only and the NU Board of Regents has never used these funds except for providing health care. The university has decided that a premium holiday would be a strategic one-time use since it benefits the employees and families whom the health plan serves.
Will the university offer another premium holiday in the future?
The university will continue to explore opportunities to strategically invest any potential savings realized by the health plan, but at this time NU cannot commit to another premium holiday. Whether the university will be in a position to do that depends on the performance of the health plan in 2015 and the still-evolving impact of the Affordable Care Act. This is a time of significant uncertainty for health care and NU’s priority will be maintaining a strong health plan that serves employees and positions the university to react to future challenges.
