If you have qualifying group health coverage through another source, such as your spouse, you may opt to receive cash in lieu of both your health and dental coverage or for your health coverage only. Qualifying group health coverage includes health coverage that provides minimum value as established by the federal Patient Protection Affordable Care Act (ACA) and is maintained by an employer or employee organization. All state California Public Employees’ Retirement System (CalPERS) health plans currently meet the law’s minimum value standards.The ACA establishes a minimum value standard of benefits of a health plan. For a qualifying group health plan to meet the ACA’s minimum value standards, the plan must cover at least 60 percent of the total allowed costs of benefits provided under the plan. Employees may refer to their plan’s Summary of Benefits and Coverage document to determine if their coverage meets the law’s minimum value standards.
Employees enrolled in individual coverage, such as Tricare, Medicare, Medi-Cal, and Covered California, are not eligible to receive cash in lieu of other health coverage, even if the coverage provides minimum value.
These payments are considered taxable income and are as follows:
Note: You will not receive any CoBen Cash if you decline dental coverage only.
CoBen Cash payments are included with your regular paycheck and are subject to the same payroll taxes (federal, state, and Social Security) as your regular salary. However, CoBen Cash payments are not considered compensation for retirement purposes. This additional cash is reported on your W-2 statement in the same tax year you received the CoBen Cash payment.
This plan applies to Excluded employees and employees in Bargaining Units 2, 7, 8, 16, 17, 18, and 19. For employees in Bargaining Units 1, 3, 4, 5, 6, 9, 10, 11, 12, 13, 14, 15, 20, and 21, your cash option is available through FlexElect, not this plan. Contact your personnel office for information and forms to enroll in a FlexElect cash option.
If you are a PI employee and want to receive cash in lieu of your health and dental coverage or health coverage only, you must enroll each plan year you want to participate. You must complete the enrollment form (STD. 702) during Open Enrollment, or as "newly eligible" after Open Enrollment but prior to January 1.
In order to receive the cash payment, you also must meet all the following criteria:
If you are appointed to a permanent position with a time base of half-time or more, you lose eligibility for the PI cash payment. If you want to enroll as a newly eligible permanent employee, you must complete a new STD. 702 within 60 days after your appointment.
If you enroll in a cash option for health and dental benefits or health benefits only as a permanent intermittent employee, you will receive your payment in a lump sum. The amount is for the period of January through June; you are not eligible for the cash option for the July through December period. Once your personnel office certifies your eligibility based on the criteria listed above, you will receive your cash option payment as follows:
These payments are made within 60 days after the State Controller's Office receives the certification from your personnel office.
If you elect to receive cash in lieu of your state-sponsored health plan but enroll in a state-sponsored dental plan, then your benefit allowance will be the amount of your dental and vision premium. In this situation, you will receive cash in lieu of health, and your dental and vision premiums will be fully paid. You will not have an out-of-pocket dental and basic vision plan premium cost.
This means you will not receive the difference between the cost of the premiums and the total allowance applicable to you. Your allowance amount, when not enrolled in all three benefits, is only that amount for the cost of the premiums or the total allowance, whichever is less.
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