Health and Welfare Summary Plan Description

• Health and Welfare SPD / Article V / Dependent Eligibility >>

5.5 Imputed Income for Certain Dependents.

1. Imputed Income if Plan Provides Coverage of Non-Dependent. In general, the value of health coverage provided to a spouse or child of a Participant is not taxable to the Participant (or to the spouse or other dependent). Unless your Domestic Partner can be treated by the Plan as your spouse or dependent under the tax code, the value of any employer-paid coverage provided to your Domestic Partner will be treated as taxable income to you and reported on your Form W-2. This income is often referred to as "imputed income." The Plan must report the imputed income and withhold certain payroll taxes from you, such as social security and income tax withholding. At the end of the year, you will receive a supplemental federal Form W-2 showing income and payroll tax withholdings that would not have been reported had no non-dependent Domestic Partner or child coverage been provided.
   
   
2. After-Tax Contributions if Employee Pays for Coverage of Non-Dependent. To the extent you pay the premium for your Domestic Partner (or his or her child) through a Monthly Coverage Payment, no imputed income for non-tax Dependent coverage will be reported on your Form W-2.
   
   
3. Dependent Status. In general, you can claim your Domestic Partner as a dependent for purposes of your tax return if, for the entire year, your partner:
   1. has the same principal place of abode as you;
   2. is a member of your household;
   3. is a resident of the U.S., Canada or Mexico, or is a citizen of the U.S.;
   4. receives over half of his or her financial support from you; and
   5. has income of less than the exemption amount of $4,300 (for 2021).
   The income requirement in (5) above, however, does not apply when determining whether your Domestic Partner is taxed on the value of coverage provided by the Plan. Therefore, it is possible that your Domestic Partner does not qualify as your tax dependent for purposes of filing your federal income tax Form 1040 (for example, if your partner had income exceeding the exemption amount), but is nonetheless your tax dependent for purposes of the Plan and eligible to receive tax-free coverage under the Plan. If you believe you might provide more than half of the support for your Domestic Partner, you may wish to use the support worksheet in IRS Publication 501 (Exemptions, Standard Deduction, and Filing Information) before you certify tax dependent status to the Plan.
   
   
4. Certification. If your Domestic Partner qualifies as a dependent under the Plan, you must provide a Certification of Tax Dependency form if you wish to have the Plan recognize your partner's dependent status. You will be asked to complete this certification annually for the following year, subject to any change in status that may occur during the year. As a condition to your Domestic Partner's participation in the Plan, you are required to notify the Plan Office immediately if your partner fails to satisfy any of conditions (1) through (4) above in subsection (c) during a year that the Plan is treating your partner as a tax dependent. By enrolling your non-dependent Domestic Partner (or his or her child) in the Plan, you also are agreeing to pre-pay any payroll-related taxes attributable to your imputed income. Failure to satisfy the annual certification requirement or pre-payment of any payroll related taxes will result in loss of coverage to the Domestic Partner and subject to reinstatement under Sections 6.3 and 6.4.
   
   
5. When Dependency Status is Determined. The requirements for determining dependency status are determined as of the end of a year and must be met for that entire year. Thus, for example, if your Domestic Partner became a member of your household during October 2021, the same month that you certify your Domestic Partnership, your partner would not be a dependent under the Plan for any of 2021. Although, in that case, your Domestic Partner may be enrolled in the Plan during the 30-day period beginning on the date of your domestic partnership, coverage of your partner would not be tax-free until 2022, and then only if all of conditions (1) through (4) of subsection (c) mentioned above are satisfied for all of 2022.
   
   
6. Children of Domestic Partner. The child of your Domestic Partner may enroll in the Plan if treating your Domestic Partner as your spouse would result in the child's eligibility for Plan coverage. The child of your Domestic Partner, who is not also your child, will generally not qualify for tax-free health coverage because federal tax law generally prevents a plan participant (who is not the original parent) from claiming a child as a dependent if that child can be claimed as a tax dependent by the participant's Domestic Partner or by the child's other parent. If you believe that the child of your Domestic Partner qualifies for tax-exempt health coverage under the Plan, please contact the Plan Office. We suggest that you consult your tax advisor for the information needed to make this determination.