I am getting taxed on a group term life insurance that was automatic
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I declined most benefit with my employer as I was getting them thru my spouse. I was automatically enrolled in Practice Paid benefits of 3x my salary. I recently became aware that I had to pay biweekly on my W2 ~ $30 a month. Is this fair ? Can a company make me sign up for something and then charge me on it saying it is a taxable benifit” ? Can I opt out of this type of insurance?
Asked May 8, 2017 by jake
Employer Sponsored Life Insurance is a benefit that most companies offer to their employees because it is a partnership of mutualism between them and the life insurance provider. Life insurance companies offer employers a discounted rated based off of the sole fact that they can sign a large number of members. In return, the employer looks great to the employees because they can offer life insurance at a better rate than if the employee were to sign up outside of the company.
Here are the answers to your three questions:
- No, it isn't fair to you. However, some people can't afford insurance on their own. so this option is a great benefit to them.
- Unfortunately, most employers can and will sign workers up automatically. There are many companies who require their employees to have life insurance through work depending on the type of job. This is mostly seen in employers who have jobs that require commuting or some type of transporting in the job requirement. Companies also like to tell employees that the coverage is a "taxable benefit" so that they won't cancel coverage. Truthfully, any insurance coverage you have is a taxable benefit.
- Based on the fact that you have life insurance coverage with your spouse, you are not obligated to carry employer sponsored insurance. Mostly all life insurance providers have strict requirements about having double coverage, as though they will not cover you if are already insured by another provider.
So here is what you need to do. Get a copy of your spouse's life insurance(preferably a declaration page) which proves that you are on the policy and call/visit your employer's HR department. The HR department will submit the documents in for you or tell you where to submit them. The great news is that they will go by your spouse's policy effective date and give you back the full amount of money that's been coming out of your check.
Answered May 10, 2017 by doclee