| •
Who is eligible for coverage?
• How do I add my partner to my
benefits?
• What if my partner and I terminate
our relationship?
• Can I cover my partner's children
under my benefits coverage?
• What will it cost me to cover
my partner and his or her children?
•
Do I have to pay taxes?
•
Is there any way for me to avoid paying taxes?
•
How do I register my partnership?
Who
is eligible for coverage?
If you are a member of AFSCME, GEO, HOA, IUOE, MAP or MNA and you are eligible for benefits at the University of Michigan, you can cover your same-sex domestic partner through the end of the calendar year your collective bargaining agreement ends. To be eligible,
you and your partner must:
-
Be of the same sex; and
-
Not be legally married to another individual; and
-
Not be related to each other by blood in a manner that
would bar marriage; and
-
Have registered or declared the Domestic Partnership in
the manner authorized by a municipality or other government
entity; and
-
Have allowed at least six months to pass since the dissolution
of a previous same-sex domestic partnership in the manner
authorized by a municipality or other government entity.
If you and your partner meet these criteria, you may add
your partner to your eligible benefit plans which, depending
on your appointment status, may include medical insurance,
dental coverage, vision plan, legal plan, optional group
life insurance and a flexible spending account.*
* Due to IRS regulations, expenses of your domestic
partner and/or your partner’s children can be submitted
for reimbursement under a FSA only if they qualify as eligible
dependents that you can claim on your federal income tax
return.
Top
How
do I add my partner to my benefits?
Generally, there are three times when you can add your partner
to your benefits at the University of Michigan:
-
As a newly hired or newly eligible faculty or staff member.
- After
experiencing an eligible family status change.
- During
the annual Open Enrollment period.
1. New Hire or Newly Benefits Eligible
If
you are newly hired or newly benefits eligible at the University,
you have a 30-day enrollment period for most plans. If you
wish coverage for your partner, you will need to list him
or her on the Personal Enrollment Worksheet you will receive
at your home address. Coverage begins on your service or
eligibility date if you enroll within 30 days of the response
date indicated on your Personal Enrollment Worksheet. (Note:
Failure to make your benefit elections within the required
timeframe will result in a default of “No Coverage”
in most instances. For details refer to Failure
to Enroll.)
Your partner will have the same effective date of coverage
as you. No additional documentation is required beyond the
information requested on your Personal Enrollment Worksheet.
2.
Family Status Changes
When you enroll in benefits as a newly hired or newly eligible
faculty or staff member, your enrollment begins on your
service date, and you cannot make any changes until Open
Enrollment. However, if you experience a family status change that results in a gain or loss of eligibility
for coverage, you may be able to make certain adjustments
to your benefits if the benefit change corresponds with
the gain or loss of eligibility for coverage. When you experience
a family status change you need to contact the HR/Payroll Service
Center within 30 days of the event. If you do not, you must
wait until the next Open Enrollment to make the change.
For a family status change, you will be asked to provide
documentation of the change.
Examples of Family Status Changes:
New
Partnership
Beginning a new partnership is a family status change that would
allow you to change from one-person medical coverage to
two-person medical coverage because acquiring a new dependent
is consistent with a dependent’s gain in eligibility
for medical coverage. Changing medical plan options would
not be permissible, however, unless there was also a corresponding
change in residence for both you and your partner. For example,
changing from M-CARE HMO to the Blue Cross Blue Shield Community Blue PPO plan would
be allowed if you were also moving outside of M-CARE’s
service area causing a loss of eligibility to participate
in the M-CARE HMO plan.
If your partnership is entered in the city of Ann Arbor, you will be required to complete a Declaration of Domestic Partnership. This form must be notarized by a notary public and signed by two witnesses; the notary can serve as one of those witnesses. Please note: The Ann Arbor Clerk's Office records the notarization date as the beginning date of the registered partnership. Newly eligible dependents must be added to your coverage within 30 days. Therefore, it is important to remember the 30-day "clock starts ticking" as of the notarization date; not the date your Declaration of Domestic partnership is filed with the City Clerk's Office. Other municipalities may have differing rules.) You must complete and return required benefits change forms along with a copy of the registration or notarized uniform declaration form provided by a City Clerk’s office to make this addition.
The
coverage effective date for your partner is retroactive
to the date of your registration or declaration as entered by the City Clerk's Office on your Certificate of Domestic Partnership. A multiple
deduction may be required to bring your account up to date
if you experience a deduction rate change. Any required
retroactive imputed income assessments will also be deducted
from your paycheck occurring after the next scheduled payroll
cut-off date.
Loss of Other Coverage
If your partner involuntarily loses his or her employer
sponsored group health insurance; Medicaid or Medicare insurance,
he or she can be enrolled onto your University group insurance
coverage. Documentation of the loss of coverage will be
required. Application must be made within 30 days from the
date your partner's coverage ends.
Coverage
becomes effective the date after your partner’s loss
of coverage date. A multiple payroll deduction may be required
if you experience a deduction rate change and any required
retroactive imputed income assessments will be deducted
from your paycheck occurring after the next scheduled payroll
cut-off date.
The events above are only two examples of family status events that allow a mid-year change of your coverage level.
Refer to Life Events for additional
information.
3. Annual Open Enrollment Period
Open Enrollment is an annual event (usually in October)
during which you can enroll in new benefits, add or delete
dependents, or change your current benefits enrollments
for the upcoming year, effective January 1st. Complete information
on the plans and any changes, along with an Open Enrollment
Personal Enrollment Worksheet showing your current coverage,
will be mailed to you before Open Enrollment begins. No
additional documentation is required beyond the necessary
steps listed in the Open Enrollment materials mailed to
you. Any additions or deletions made during Open Enrollment
are effective January 1st of the following calendar year.
Please note: Any dependent removed during Open Enrollment
will not be offered the opportunity to continue coverage
as provided under the Consolidated Omnibus Budget Reconciliation
Act of 1986 or “COBRA.”
Refer to Benefits Enrollment
for complete instructions on enrolling in benefits.
Top
What if my partner and I terminate
our relationship?
If you and your partner terminate your relationship, your
partner is no longer an eligible dependent and you must
remove your partner from your benefits within 30 days of
the termination. Failure to provide notification and proof
of the dissolution of your domestic partnership within 30
days may result in additional and unwanted imputed income,
in addition to claims and premium costs you. If you report
the termination within 60 days, COBRA continuation will
still be sent to your partner. Failure to report dissolution
of your relationship after 60 days will result in forfeiture
of your partner’s rights to COBRA continuation.
Your partner’s children must also be removed when
they no longer meet the eligibility criteria for each benefit.
If they are removed within the same time frames discussed
above, COBRA continuation information will be sent so that
coverage may be continued.
Top
Can I cover my partner's children
under my benefits coverage?
Yes. In addition to coverage for a domestic partner, faculty
and staff may also elect coverage for the qualified child(ren)
of a domestic partner. The dependent child(ren) of a domestic
partner are eligible for coverage through the end of the
month they turn 25 if they:
-
Live primarily with you but may be temporarily away from
home attending school or visiting the other parent; and
-
Are claimed as a dependent on your or your partner’s
most recent income tax return; and
-
Are not eligible for coverage through the University as
an employee; and
-
Are not already covered through the University as a dependent
on another University employee’s coverage.
They
can be added during one of the events listed in How
do I add my partner to my benefits? above. If your partner's
child does not meet the criteria of residing with you and
is not listed as a dependent on your or your partner's income tax
return now but may be in the future, you have 30 days from
the date all the criteria are met to add him or her onto
your benefits. You do not have to cover your partner if you want to cover his or her children as long as they meet the eligibility criteria listed above.
Children must be removed when they no longer
meet the eligibility criteria for each benefit. Children
must be removed within the appropriate time frame. If you report the child's loss of eligibility status within 60 days, COBRA
continuation information will be sent so that coverage may
be continued. Failure to report loss of eligibility after 60 days will result in forfeiture of your partner's child rights to COBRA continuation.
Top
What will it cost me to cover
my partner and his or her children?
The insurance premium rates and University contributions
for partners are identical to those for spouses or families
(i.e. the two-person rate and contribution would apply if
the coverage changes from single to two-person). However,
there are additional financial and tax implications to consider.
See the next question below.
Top
Do I have to pay taxes?
Yes. The Internal Revenue Service (IRS) has determined that
the University’s cost of providing benefits for same-sex
domestic partners and their children who do not meet the
Internal Revenue Code's definition of qualified dependents for group health plans is considered
ordinary or “imputed income” and is, therefore,
subject to taxes. The University must report the fair market
value (FMV) of an employee’s domestic partner benefits
as wages or “imputed income” to the Internal
Revenue Service resulting in increased taxable gross income
for federal, state and city (where applicable) income taxes
as well as for FICA (Social Security and Medicare) taxes
withheld from the employee’s paycheck. As a result,
the cost to the employee of obtaining benefits for a same-sex
domestic partner is actually more than just the cost of
the employee’s required bi-weekly or monthly premium.
Additionally, if an employee elects to pay, or is defaulted
to premium deductions on a pre-tax basis, the employee contribution
amount attributable to domestic partner coverage is converted
to an after-tax deduction.
Imputed income does not affect calculations for University-sponsored
life or retirement or disability income. Nor does imputed
income affect dependent life or legal plan coverage because
both benefits are paid entirely by the employee and deductions
are always taken on an after-tax basis.
To help you calculate the approximate amount and impact
of the additional annual taxes you will pay on this imputed
income, complete the Tax Worksheet
for Same-Sex Domestic Partner Benefits.
Top
Is there any way for me to avoid
paying taxes?
If your same-sex domestic partner and/or his/her eligible
dependent children qualify as your dependents for federal
income tax purposes, the University costs for their benefits
are not considered taxable income to you.
According
to the Internal Revenue Code, your same-sex domestic partner
and/or his/her children can be claimed as dependents for
federal income tax purposes (on your tax return) for any
calendar year in which they are:
-
Receiving over 50% of his or her support from you for
the year
- Citizens,
nationals or residents of the United States;
-
Living with you and a member of your household; and
-
In a relationship with you that does not violate local
laws.
The University will assume your same-sex domestic partner
(or your partner's child) DOES NOT qualify as your tax dependent
under the Internal Revenue Code's definition of a qualified dependent for group health plans unless a Declaration
of Tax Dependency Form (PDF) is completed each tax year
and is on file with the Benefits Office.
Top
How do I register my partnership?
Regulations concerning registering a same-sex domestic partnership
may vary between municipalities. The Ann Arbor City Council
approved a Domestic Partnership Ordinance in 1991.
Ann
Arbor -Two Ways to Enter a Partnership
Both Ann Arbor residents and non-residents are eligible
to complete a Declaration of Domestic Partnership. This
form must be notarized by a notary public and signed by
two witnesses; the notary can serve as one of those witnesses.
The
Declaration of Domestic Partnership can be registered or
kept in private. To register the Declaration, the form must
be filed with the Ann Arbor City Clerk. You can either hand
deliver or mail the notarized document with the appropriate
fee to the City Clerk's Office, 2nd Floor, 100 N. Fifth
Ave., Ann Arbor, MI 48104. The Declaration then becomes
a public document available for others to see. For private
registration, the Declaration is not registered with the
City Clerk; all copies are retained by the partners. A Certificate
of Domestic Partnership is not sent and no public record
of the partnership would exist. The University recognizes
both publicly registered and private same-sex Declaration
of Domestic Partnerships entered into under the Ann Arbor
City ordinance.
Forms
and information may be obtained by downloading from the
Same-Sex Domestic Partnership
Forms page, or from:
City
Clerk's Office
City of Ann Arbor
100 North Fifth Avenue
Ann Arbor, MI 48108
(734) 994-2725
Other
Municipalities and Governmental Entities
Many other municipalities and governmental entities recognize
and register same-sex domestic partnerships meeting University
of Michigan’s eligibility requirements. Registration
in Ann Arbor is not a requirement. If your partnership satisfies
the criteria outlined in the Who is eligible
for coverage? section above, any benefits, privileges,
rights and responsibilities that accrue to spouses of University
faculty and staff by virtue of their status as spouses will
accrue to committed same-sex partners of University faculty
and staff by virtue of their status as same-sex partners.
Top
Final
Note
No information contained herein is intended or should be
construed as tax advice. Employees are encouraged to consult
a qualified tax advisor before electing this coverage.
The University reserves the right to change, amend, or terminate
the plans at any time. This benefits overview is not intended
to give rise to any right to employment, continued employment,
or any benefit with or from the University of Michigan.
Top
|
