Benefits Handbook

If you choose Voluntary AD&D, your cost depends on your amount of insurance. The chart below lists the costs for each $1,000 of individual coverage and each $1,000 of family coverage.

You must continue to pay for your Voluntary AD&D coverage if you become disabled.

You pay for your Voluntary AD&D coverage (other than coverage for a domestic partner) with before-tax dollars, unless you are on a leave of absence or long-term disability (in which case, your contributions are made on an after-tax basis). This means that the money is deducted from your pay before federal, Social Security Taxes and most state and local income taxes are withheld.

By contributing on a before-tax basis, you reduce your taxable pay, and as a result, you lower the amount of taxes you pay.

Note: If you take an authorized unpaid leave of absence that's covered under the Family and Medical Leave Act, you may elect to continue your before-tax contributions by prepaying them for the period of the leave (otherwise, you will pay for the contributions monthly on an after-tax basis). To prepay before-tax contributions, you must authorize a lump-sum payroll deduction prior to the start of the leave. See your Human Resources representative for details. Coverage is continued during the course of the authorized unpaid leave for no more than 48 months.

Your contribution to cover a domestic partner and the dependent child(ren) of a domestic partner is the same as the cost to cover other eligible family members. However, because of the IRS requirements, these contributions will be made on an after-tax basis—even for coverage that would in most cases be paid on a before-tax basis.

If your partner (or his or her children) qualifies as a dependent under IRS section 152, your contributions for domestic partner coverage will be on a before-tax basis.

None. Your salary will be used to calculate salary related benefits.

Paying for coverage on a before-tax basis means that the amount you pay toward your Voluntary AD&D coverage comes out of your pay before taxes are withheld, so you are paying taxes on a lower amount of salary. Your take-home pay is higher than it would be if you paid for your coverage on an after-tax basis.

Your Social Security benefits may be lower than they otherwise might be. This is because your Social Security is based on your taxable pay (up to a specified annual maximum amount of earnings), and your taxable pay is reduced by the amount you contribute to the Voluntary AD&D Plan.

Your contributions won't be included in your taxable gross earnings on your W-2 statement. This reduces your taxable pay and as a result, lowers the amount of taxes you pay.

The benefit payment is not subject to federal income taxes and in most cases state income taxes.

The benefit payment may be subject to federal estate taxes.

Tax rules change from time to time. Please note that the information contained in this Summary Plan Description must not be construed as tax advice, which you can receive only from a professional tax advisor, who should be consulted on federal, state, income, gift and estate tax questions.