print logo
Main Content Anchor

Cash Option CoBen

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.

Open Enrollment is September 12 through October 7, 2016 (Closed)

Enrollments and changes made during Open Enrollment are effective January 1, 2017. 

If you enrolled or you were automatically re-enrolled during Open Enrollment, you have until December 31, 2016 to cancel or make changes to your enrollment.

You may still be able to enroll or make changes to your benefits if you are newly hired, newly eligible, or experience a change in status (permitting event).  Please contact your department’s personnel office for more information.

Benefits of the Cash Option

 These payments are considered taxable income and are as follows:

  • $155 - if you decline both the state-sponsored health and dental plans
  • $130 - if you decline only the state-sponsored health plan

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.  

Permanent Intermittent Employees (PIs) Enrolled in CoBen Cash

If you're 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:

  • Be eligible to enroll in health and dental insurance as of January 1, 2017 (i.e., you qualified in the July 1 - December 31, 2016 control period).
  • Have a permanent-intermittent appointment from January 1, 2017, through June 30, 2017.
  • Be paid for at least 480 hours worked from January through June 2017.

If you're 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.

Lump Sum Payment

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.  After June 30, 2016, once your personnel office certifies your eligibility based on the criteria listed above, you will receive your cash option payment as follows:

  • $780 in lieu of health benefits.
  • $930 in lieu of health and dental benefits.

These payments are made within 60 days after the State Controller's Office receives the certification from your personnel office.

Cost of Premiums Only

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.

Forms and Publications

(To read these files, you’ll need Adobe Reader – get a free download.) 

 

  Updated: 7/30/2015
One Column Page
Link Back to Top