Healthcare Premium Deduction Changes

Medical, dental and vision premiums are currently collected one-month-in-advance. For example, premiums collected for medical insurance on your November check(s) pays for coverage in December. Effective Jan. 1, 2022, premiums will be collected in the current month for January coverage and continue for all subsequent months with the following impact:

  • All benefit-eligible employees who paid medical, dental or vision premiums via payroll deduction in November (which pays for December coverage) will have NO medical, dental or vision deductions on their December check(s). All deductions will resume in January 2022 to pay for the current month’s medical, dental, and/or vision coverage.
  • This premium deduction change will also impact when coverage ends in the event of termination of employment. Effective on or after Jan. 1, all medical, dental and vision coverage(s) will end the last day of the month of termination with the option to enroll in COBRA continuation coverage effective the 1st of the month following termination. For example, employee terminates on Jan. 25, 2022 will have medical, dental and/or vision coverage end on Jan. 31 with COBRA eligibility beginning Feb. 1.

In addition, the deduction schedules for all bi-weekly, non-exempt employee benefits will change:

  • Currently, there are 26 bi-weekly pay periods each year with medical premiums collected each pay period (i.e., 26 deductions per year), dental premiums collected on the 1st paycheck each month (i.e., 12 deductions per year), and vision premiums collected on the 2nd paycheck each month (i.e., 12 deductions per year), etc.
  • Effective Jan. 1, 2022, ALL bi-weekly benefit premiums will be deducted over 24 pay periods (i.e., only 1st and 2nd paycheck each month). This will standardize payroll deduction amounts for all benefits, making it easier for bi-weekly employees to understand and budget for recurring expenses.