In addition, you may also select Employee Voluntary Life Insurance with an overall maximum of $800,000 (including Employee Basic Life). You can elect from one times your basic annual salary up to five times your basic annual salary. You will be required to provide evidence of insurability for coverage levels and amounts exceeding the lessor of three times your basic annual salary or $400,000 before coverage goes into effect.

Taxation of Group Term Life Insurance
The Internal Revenue Service (IRS) provides that the first $50,000 of group term life insurance coverage does not result in any gross income for federal income tax purposes. Amounts in excess of $50,000 are taxable: the cost of the group term life insurance on an employee's life provided under a policy carried directly or indirectly by an employer (National Jewish Medical and Research Center), less any employee contributions for the whole amount of group term life insurance, is considered gross income of the employee. The cost of the group term coverage for such purposes is based upon uniform premiums established by the IRS. The calculation of the taxable amount is called imputed income.

The following is an example of how imputed income is derived. The formula is based upon an individual who makes $60,000 per year and who elects supplemental coverage at one times his/her salary. The employee is 40 years old.

Basic Life Insurance Coverage	$60,000		1 x salary provided by National Jewish
1 x salary elected as supplemental coverage	$60,000		Coverage amount
Total Coverage	$120,000
Less $50,000 exclusion	- $50,000		IRS Section 79 exclusion
Balance	$70,000		Coverage for Section 79 purposes
Section 79 cost	$142.80		$11.90 per month (70 units x $.17 per month)
Less employee contribution	- $136.80		$11.40 per month 60 units x $.19 per month)
Imputed Income	$6.00		Or $.50 per month, $.25 per pay period

 

[ Welcome | Enrollment Form | Help | Voluntary Life Enrollment Worksheet | Log Off ]

© 1998 Benefits Access Inc.