Voluntary Layoffs

[Guest44830]

My company is implementing voluntary layoffs due to short work. They are allowing us to keep our medical insurance but we are required to pay our premiums during the layoff period. Do I still receive my section 125 tax benefit for premiums paid? I want to ensure my W2 will be correct at year-end. Thank you for your help.

[Brian Gilmore]

If the furlough period is unpaid, you may be required to pay the employee-share of the premium on an after-tax basis outside of the Section 125 cafeteria plan during the layoff period.  However, they may offer pre-pay or catch-up payment options that allow you to pay on a pre-tax basis through the Section 125 cafeteria plan through compensation paid before or after the layoff period. 

If the furlough period is paid, it is likely that the company will continue to take the employee-share of the premium on a pre-tax basis through the cafeteria plan in the same manner as when actively at work.

In short, there are multiple way to handle, so you'll want to check with your employer for the specifics.

2024 Newfront Health Benefits While on Leave Guide

[Guest44830]

Thank you! Very helpful.