How to compute GTL imputed income for partial month coverage?

[Guest amau_99]

Case 1: Single GTL plan

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I = (C - $50,000) * R - D

I partial imputed income

C coverage amount

R rate in $/1000$

D premimums paid by the employee

partial imputed income:

If = f * I

f fraction of the month

An employee with anual salary of $80,000 is paid semi-monthly and has one GTL plan. His coverage amount is 2 times his annual salary. Group term life is imputed in the last period of each month. For the second pay period in April he receives a pay rise to $85,000 anual which impacts his imputed income.

Problems:

a) The premium for the first half month is based on an amount of ($160,000 - $80,000)/1000 * $0.17 = $18.70 for April. How to calculate the first half months premium?

(I) $18.70 / 30 = 0.623333..., $0.62 * 15 = $9.30

(II) fraction of the first half month is 15/30 = 0.5, 0.5 * $18.70 = $9.35

Case 2: Multiple GTL plans

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Is this formula correct?

I = (C - $50,000) * R - D

I partial imputed income

C = Sum(C_i) total coverage amount

C_i coverage amount per plan i

R rate in $/1000$

D = Sum(D_i) total premimums paid by ee

D_i premimiums per plan i paid by ee

Total imputed income for the month:

If_tot = Sum(If_i) = Sum(f_i * I_i)

with extra condition for the fractions:

Sum(f_i) = f_1 + f_2 + ... = 1.0

If_tot total monthly inputed

If_i monthly imputed income per plan i

f_i fraction of the month per plan i

An employee with anual salary of $80,000 is paid semi-monthly and has a GTL plan A which covers 1 time anual salary and plan B covers for 2 times anual salary. Group term life is imputed in the last period of each month. For the second pay period in April he receives a pay rise to $85,000 anual which impacts his imputed income.

Does this compute compliant to the regulations?

[KIP KRAUS]

AmAu_99:

Your formulas are making me dizzy. The way I would calculate the imputed income would be as follows:

$160,000-50,000 = $110,000

110 X .17 = $18.70

$18.70 x .5 = $9.35

170,000-50,000 = $120,000

120 x .17 = $20.40

$20.40 x .5 = $10.20

Imputed income for the month= 9.35+10.20= $19.55

The above calculation is based on a GTL Plan equal to 2 x Earnings with the employee paying nothing for this coverage or for supplemental coverage. If he were paying for supplemental coverage, the amount he pays would be deducted from the total imputed income figure. Check out the following site http://www.phl.com/group/utable.htm for a good example of how to calculate imputed income.

It looks like you have the right idea

[Guest amau_99]

Leaves still the question for employees having multiple GTL plans with different coverage amounts. How would the calculation need to proceed correctly?