Cash Option Non-CoBen - CalHR

Cash Option

If you have medical and/or dental insurance through a spouse, domestic partner, or another source, you have the option to receive cash in lieu of your State-sponsored health and/or dental benefits.

 

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Benefits of the Cash Option

Depending on which cash option you enroll in, you'll receive:

  • $128/month in lieu of health benefits;
  • $12/month in lieu of dental benefits; or
  • $140/month in lieu of medical and dental benefits.

 

This money is treated as taxable income and is reported on your W-2 statement for the tax year when you receive payment. Cash option payments are not considered compensation for retirement purposes.

This plan applies to employees in Bargaining Units 1, 3, 4, 5, 6, 9, 10, 11, 12, 13, 14, 15, 20, and 21.

Excluded Employees and Employees in Bargaining Units 2, 7, 8, 16, 17, 18, and 19: You're covered by Consolidated Benefits (CoBen) and your cash option is available through CoBen, not this plan. Contact your personnel office for information and forms to enroll in a CoBen cash option.

Reminders for 2014

  • State employees who are dependents on their parents' state-sponsored benefits are now eligible to receive cash in lieu of health and dental coverage. This is a change from previous years and will bring us into compliance with the new federal health reform requirements.
  • The monthly administrative fee has been reduced from $2.50 to $1.00.

Before enrolling in a cash option

The cash option is designed to expand your benefit options, not limit or decrease important medical and/or dental coverage for you and your family. Accordingly, it's important to make sure your health and dental needs are met before you enroll in a cash option. Here are some factors to consider when making your enrollment decision.

  • Three-Year Commitment-If you enroll in the cash option in lieu of dental benefits, you may not re-enroll in a State-sponsored dental plan for three "plan years." (Plan years run from January 1 through December 31.) After completing the three-year commitment, you may enroll in a dental plan during the open enrollment period. The only exception is if you lose your other dental coverage. In this instance, you would be allowed to re-enroll in a State-sponsored dental plan within 60 days.
  • If you are eligible to receive survivor health and dental benefits after the death of a spouse or domestic partner, you can continue to receive the cash.

 

Who may enroll in a cash option? 

You're eligible to enroll in a cash option if you have a permanent position that is half- time or more. If you have a limited term (LT) or temporary (TAU)position, you're eligible if you have a mandatory right of return to a permanent position that is half-time or more.

  • If you're a permanent-intermittent employee, you may enroll in the cash option.
  • If you're in Bargaining Unit 6, you may not enroll in the cash option for dental benefits. This restriction is set by the union's Benefit Trust. However, you may enroll in the cash option for health benefits.
  • If you're covered by Consolidated Benefits (CoBen), your cash option is available through CoBen, not this plan. (CoBen covers excluded employees and bargaining units 2, 7, 8, 16, 17, 18, and 19.) Contact your personnel office for information and forms to enroll in a CoBen cash option.

 

When may I enroll?

Your first opportunity to enroll in a cash option is within 60 days after becoming "newly eligible" for these benefits. However, for many employees the typical time to enroll is during the annual Fall open enrollment period.

Open Enrollment Period (September 16 - October 11, 2013)

During this period, you can enroll in a cash option by submitting an enrollment form to your personnel office by the closing day of open enrollment (October 11, 2013). After you turn in your form(s), you have until December 31, 2013, to cancel your enrollment or make changes. There are enrollment forms available online - see below.

 

If you're already enrolled in a cash option, you don't need to take any action during open enrollment unless you want to cancel or change your cash option. If you enroll (or cancel/change your enrollment) during the 2013 open enrollment period, your cash option (or cancellation/ change) becomes effective January 1, 2014. Once enrolled, your cash option automatically continues each year.

 

Exception to automatic re-enrollment in cash option: Permanent-intermittent employees are not automatically re-enrolled in a cash option. If you're a permanent-intermittent employee enrolled in a cash option, and you want to continue your cash option next year, you must submit a new enrollment form (STD. 701C) during open enrollment.

Newly Eligible

Besides the annual open enrollment period, you also have the opportunity to enroll in a cash option within 60 days after becoming "newly eligible." You're newly eligible if:

  • you're a new State employee hired after the open enrollment period;
  • you were on an approved leave of absence during the entire open enrollment period;
  • you experience a change in status that permits you to enroll as newly eligible. If your change in status results in a concurrent approved leave of absence (e.g., birth of child followed by a maternity leave), you may enroll by the deadlines specified below after you return to work; or
  • your time base/employee designation changes from one that was ineligible to one that is eligible, or you change from a permanent-intermittent position to a permanent position with a time base of half-time or more.
(If you're a permanent-intermittent employee, refer to Cash Option for Permanent-Intermittent Employees for more details.)

Deadline for newly eligible employees to enroll:

If you're newly eligible and want to enroll, you must submit enrollment forms to your personnel office within 60 days after becoming newly eligible. Correctly completed forms received at the State Controller's Office by the 10th of the month are effective the 1st of the following month (except when the 10th is on a weekend or holiday, in which case the cut-off date will be on the next regular workday).

If you're newly eligible, your last possible effective date of participation in the 2013 plan year is December 1, 2013. For your enrollment to be effective December 1, 2013, the State Controller's Office must receive your enrollment form by November 10, 2013. Forms received after that date will be processed for the 2014 plan year.

 

Can I change my enrollment?

You can't change or cancel your enrollment during the plan year unless there is a change in your status, called a "permitting event." See Changes in status ("permitting events") for a complete list of "permitting events."

 

If you currently are enrolled in a cash option and want to discontinue it for following plan year, you must complete a Cash Option Enrollment Authorization (STD. 701C) - PDF and submit it to your HR Office during open enrollment (September / October).

 

If you currently are enrolled in a cash option and want to make other changes such as adding eligible dependents and/or another cash option, you must complete an enrollment document and submit it to your personnel office during open enrollment (September / October).

 

Administrative fee

If you enroll in a cash option, a $1.00 fee is deducted from your after-tax salary each month. This fee covers administrative costs of the program.

 

Cash option for Unit 6 employees

If you're in Bargaining Unit 6, you may not enroll in the cash option for dental benefits. This restriction is set by the union's Benefit Trust. However, you may enroll in the cash option for health benefits.

Cash option for CoBen employees

If you're covered by Consolidated Benefits (CoBen), our cash option is available through CoBen, not this plan. CoBen covers excluded employees and bargaining units 2, 7, 8, 16, 17, 18, and 19. Contact your personnel office for information and forms to enroll in a CoBen cash option. 

Cash option for permanent-intermittent employees

If you're a permanent-intermittent employee and want to receive cash in lieu of your health and/or dental benefits, you must enroll each plan year you want to participate. You must complete the enrollment form (STD. 701C) 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/or dental insurance as of January 1, 2014 (i.e., you qualified in the July 1- December 31, 2013 control period);
  • have a permanent-intermittent appointment from January 1, 2014, through June 30, 2014; and
  • be paid for at least 480 hours worked from January through June 2014.

 

Lump sum payment: If you enroll in a cash option for health and/or dental benefits 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, 2014, once your Personnel Office certifies your eligibility based on the criteria listed above, you will receive your cash option payment as follows;

  • $768 in lieu of health benefits
  • $72 in lieu of dental benefits; or
  • $840 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. The $1.00 monthly administrative fee ($12 total for the plan year) is deducted from your lump sum payment.

Impact of Time Base Changes

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. 701C within 60 days after your appointment.  This appointment makes you newly eligible for a reimbursement account; if you want to enroll in a Medical and/or Dependent Care Reimbursement Account, you must complete a STD. 701R within 60 days after the date of your appointment. Conversely, if you change from permanent status to PI, you lose eligibility for the reimbursement account, unless you choose to continue your Medical Reimbursement Account deductions through COBRA.

 

Changes and Cancellations

Once you enroll in a cash option, you can't cancel or change your enrollment during the plan year (January 1 through December 31) unless you experience a change in status, called a "permitting event." See the complete list of status changes that permit you to cancel or change your enrollment.

 

If you're enrolled in a cash option when you retire, your cash option will stop automatically. You need to take the following actions to protect your benefits:

 

If enrolled in cash option for health benefits: You have 30 days prior to or 60 days following the date of your retirement to enroll in California Public Employees' Retirement System (CalPERS) health plan. If you don't enroll within this time period, you must wait until the next health open enrollment. Your enrollment at that point would be handled through CalPERS.

 

If enrolled in cash option for dental benefits: You have 30 days prior to or 60 days following the date of your retirement to enroll in a dental plan. If you don't enroll within this time period, you must wait until the next dental open enrollment. If you enroll prior to retirement, your dental enrollment will be processed through your personnel office. If you enroll following retirement, your enrollment is handled through CalPERS.

 

Payroll Status Changes

 In addition to the permitting events listed below, here are some other payroll status changes and how they affect your FlexElect enrollment:

  • Non-Industrial Disability Insurance (NDI): If you go on NDI while enrolled in a cash option, your cash option payment remain in effect and will be reflected on your NDI check.
  • Industrial Disability Leave (IDL) and Temporary Disability (TD): If you go on IDL or TD while enrolled in a FlexElect cash option, your enrollment remains in effect. You will receive a separate check for your cash option, issued about a week after your IDL or TD check.
  • State Disability Insurance (SDI) for employees in Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20 & 21: If you go on SDI while enrolled in a cash option, your enrollment will stop while you are on leave. If you return to pay status in the same FlexElect plan year, your enrollment will resume.
  • Unpaid Leave of Absence: If you are on an unpaid leave of absence while enrolled in a cash option, your enrollment will stop while you are on leave. If you return to pay status in the same FlexElect plan year, your enrollment will resume
  • Military Leave: If you are called to active military duty for the War on Terrorism, you are eligible to retain your State benefits for up to 365 calendar days above the 180 calendar days provided by GC Section 19775.17. If you are currently receiving Flex Cash in lieu of health and/or dental benefits, you may continue to receive the cash for the duration of your military leave, not to exceed the time limits mentioned above. Military Leave is not a permitting event to newly enroll into the Flex Cash Program.

Changes in status ("permitting events")

If you experience a change in status that's listed below, you're permitted to take the action that's listed next to that change. You have 60 days following the date of your status change to take the corresponding action.

 

Your completed form(s) must be received at the State Controller's Office by the 10th of the month to be effective on the first of the following month.

 

Initial appointment to State service (includes reinstatement following a permanent break in service)

May enroll in cash option as newly eligible.

Marriage

May enroll in cash option as newly eligible or, if currently enrolled, may cancel/change cash option.

Divorce (date of final divorce), legal separation, or annulment

May enroll in cash option as newly eligible or, if currently enrolled, may cancel/change cash option.

Death of spouse or domestic partner

May enroll in cash as newly eligible or, if currently enrolled, may cancel/change Flex elections.

Loss or commencement of spouse's or domestic partner's employment

If currently enrolled, may cancel/change cash option. New enrollment into cash not allowed.

Loss of medical and/or dental coverage provided through spouse, domestic partner, or other source, due to an employment status change

If currently enrolled in cash option, may cancel/change cash option. New enrollments not allowed.

Commencement of medical and/or dental coverage provided through spouse, domestic partner, survivor benefits, or other source, due to an employment status change

May enroll in cash option as newly eligible or, if currently enrolled, may cancel/change cash option.

Change in bargaining unit or employee designation (e.g., transfer, promotion) that results in a loss or gain of eligibility for cash option

If currently enrolled in health and/or dental plan, may change coverage or cancel/change cash option per union requirements. New enrollments not allowed.

 

Instructions for completing the form

The forms to enroll in the are linked below. Refer to the following instructions when completing these forms. Please type or print using a ball point pen.

Cash Option Enrollment Authorization (STD. 701C): If you want to enroll for the first time, cancel, or make changes to your current cash option, you must complete a:

 

In addition to the cash option enrollment form, you must complete the CalPERS Health Benefits Enrollment Form (HBD-12) - PDF if you:

  • change or cancel your current health coverage; or
  • a covered dependent has a change in eligibility or you want to add an eligible dependent.

 

You also must complete the Dental Enrollment Form (STD. 692) - PDF if you:

  • change or cancel your current dental coverage; or
  • a covered dependent has a change in eligibility or you want to add an eligible dependent.

 

The health and dental forms must be submitted to your personnel office along with your cash option enrollment form (if you're making the changes indicated above). Both forms are available from your personnel office.

 

When husband and wife or domestic partners both work for the State: If you're an enrollee canceling your health and/or dental coverage to go on your spouse's or domestic partner's plan, who also is a State employee, you and your department's personnel staff must coordinate submission of the health, dental, and cash option enrollment forms for you and your spouse/domestic partner.

 

The effective date for canceling your coverage, and the date for your spouse or domestic partner to add you as a dependent, should be the same. The health and/or dental enrollment forms for you and your spouse/domestic partner must be submitted as a package with your cash option enrollment form.

Cash Option Enrollment Authorization

Section 1 - Enrollment:

  • If you're enrolling during the annual open enrollment period, check Item A.
  • If you're "newly eligible" enrolling outside the open enrollment period due to a permitting event, check Item B.
  • If you're changing your enrollment due to a permitting event, check Item C.
  • If you're canceling your enrollment, check Item D.

 

Section 2 - Social Security Number:

Enter your Social Security number.

 

Section 3 - Name:

Print your first name, middle initial, and last name.

 

Section 4 - Cash Option:

Medical Coverage: If choosing to receive the cash option in lieu of your health benefits, enter $128 in Item A. If you don't want to receive the cash and wish to keep your State-sponsored health plan, enter N/A in Item A.

Dental Coverage: If choosing to receive the cash option in lieu of your dental coverage, enter $12 in Item B. If you don't want to receive the cash and wish to keep your State-sponsored dental plan, enter N/A in Item B.

Total Cash: Enter the total cash option amount (sum of Items A and B) in Item C.

 

Section 5 - SCO Use Only:

SCO will complete.

 

Section 6 - Statement of Other Medical and/or Dental Coverage:

If choosing the cash option in lieu of health and/or dental benefits, you must complete Item 6. In Item A and/or B, list the carrier for your other health and/or dental insurance. In Item C, check the box showing who you have your other coverage through. If your coverage is through your spouse or domestic partner, you also must complete Item D.

 

Section 7 - Employee Signature:

Read this section carefully, then sign and date the form on the line marked. This section contains important information you should be aware of when enrolling. Your signature certifies you have other health and/or dental coverage and that you have read the information and agree to the terms and conditions of the program as outlined on the STD. 701C and on this website.

 

Sections 8-21:

Your personnel office must complete.

We recommend you make a copy of your completed form before you send it to your personnel office. Once your personnel office completes the "Agency Use Only" sections, the original copy is forwarded to the State Controller's Office along with any other necessary forms (e.g., HBD-12, STD. 692). Your personnel office has been instructed to keep a copy in your personnel file and send you a copy.

Forms and Publications 

 

 


Updated 8/28/2013