What coverage is available for my legally domiciled adult (LDA)?
An LDA may be covered under your medical, dental and vision plans.
What is imputed income and why does it apply to benefits for my LDA?
The IRS requires that the value of benefits provided for a person who is not your dependent for federal income tax purposes be subject to taxation. If this applies to your LDA, the value of his/her benefits is considered income to you and is added to your total income for tax purposes. This added “income” is called imputed income.
Who qualifies for coverage as a Legally Domiciled Adult?
A Legally Domiciled Adult is an individual over 18 who has for at least 6 months lived in the same principal residence as the employee and remains a member of the employee’s household throughout the coverage period; and who either
(A) has a close personal relationship with the employee (not a casual roommate or tenant), shares basic living expenses and is financially interdependent with the employee, is neither legally married to anyone else nor legally related to the employee by blood in any way that would prohibit marriage, and is neither receiving benefits from an employer nor eligible for any group coverage, or
(B) is the employee’s blood relative who meets the definition of his or her tax dependent as defined by Section 152 of the Internal Revenue Code during the coverage period and is neither receiving benefits from an employer nor eligible for any group coverage.
Can I enroll myself, my spouse, and an LDA under the Medical, Dental and Vision Plans?
No. You can elect coverage for a maximum of two adults, in addition to any eligible dependent children. So, if you’re legally married, you can elect adult coverage for you plus either your spouse or an LDA.
If I have family coverage now can I also opt for LDA coverage?
Health, dental and vision care coverage is available to two adults – the employee and either a spouse or LDA. If the employee is the only adult now using the family coverage and the other adult meets the eligibility requirements for LDA status, the second adult can be added, provided you have not covered another LDA within the past six (6) months. If, however, you cover your legal spouse under family coverage, you cannot also cover an LDA.
Are children of LDAs eligible for coverage?
A child’s eligibility depends on the child’s relationship to the employee. A child related to the employee by blood or adoption would, for example, qualify as a dependent.
Can I enroll my mother as an LDA if she is my tax dependent, but we do not live together?
No. To qualify as an LDA an individual must meet all eligibility requirements which include – for both Category A and Category B LDAs – that the adult has lived with you in your principal residence for at least six months before enrollment and continues to live with you during the coverage period.
When can I enroll an LDA for coverage?
You can enroll an LDA in medical, dental or vision plans on or prior to the last day of the month following the date of hire, during open enrollment, or within 60 days of a qualified change in status. After the termination of coverage for an LDA, there is a six month waiting period before a new LDA may be enrolled.
Can I select Kaiser, CareFirst, or UHC for medical coverage for an LDA?
Yes. You can enroll an LDA in any of the available medical plans. The LDA must participate in the same plan in which you, the employee, are enrolled.
Will the medical plans provide primary coverage if the LDA is 65 years old?
No. If an LDA is age 65 or older, claims will be processed under UHC, Aetna, CareFirst or Kaiser as secondary.
How much will these benefits cost me?
Employees who elect LDA coverage will pay the same amount for coverage as employees do for employee + spouse or family coverage. However, there may be other cost implications depending on whether or not the LDA is the employee’s tax dependent.
Are there tax or other legal implications of these benefits?
There could be. For example, federal law requires that the value of employer-provided coverage for LDAs who are not tax dependents be imputed and reported as taxable income to the employee. We recommend that you consult with an attorney about the tax and other legal implications of electing LDA coverage.
How much will be imputed as taxable income to the employee?
The amount reported as taxable income for LDA coverage under the medical, dental and vision plans are determined each year. Federal tax laws require employers to report as taxable income the fair value of coverage but the IRS has never issued guidance on how “fair value” should be determined. While Georgetown follows a formula used by many employers, this is not guarantee that the IRS will agree with the amount of taxable income. We recommend that you consult with your attorney or tax professional if you have any questions.
What is Section 152 of the Internal Revenue Code and why is it important?
To qualify for Category B LDA coverage, an individual must meet the definition of “dependent” set forth in Section 152 of the Internal Revenue Code. That section specifies the conditions of financial support, relationship and citizenship necessary to “dependent” status under federal tax law.
As discussed above, the tax treatment of the employer-provided coverage varies depending upon whether or not the LDA is the employee’s tax dependent. In addition, federal law prohibits the reimbursement of expenses of an LDA who is not also a tax dependent under a Health Care Reimbursement Account.
To find out more about the specifics of Section 152 go to www.irs.gov. Given the complexity of the criteria, we recommend that you consult with your attorney or tax professional about the specifics of your particular situation.
Will the Medical, Dental, or Vision Plan require evidence of insurability as an enrollment requirement for the LDA?
No. There are no evidence of insurability rules requirements for any individual under these plans.
When does an LDA become ineligible for coverage?
An LDA’s eligibility under the Medical, Dental or Vision Plan will end on the earliest of:
- the end of the month following an employee’s date of termination, or
- the end of the month in which the individual no longer satisfies the eligibility criteria for LDA status.
Employees must notify the Faculty and Staff Benefits Office immediately of any changes in eligibility status.
When an adult insured as an LDA loses LDA eligibility, is that individual eligible for COBRA benefits?
No. COBRA coverage applies only to the legal spouse and dependent children of an employee. An LDA who has lost eligibility may not elect continuing coverage under COBRA in his or her own right. If the employee remains an active Georgetown employee and the LDA relationship terminates, the LDA is not eligible for COBRA. Georgetown will extend, however, certain COBRA-like benefits to LDAs. An employee on COBRA may add an LDA in the same manner as is permitted for active employees with spouses. If an employee with an LDA terminates employment and chooses COBRA coverage for 18 months, the employee may continue coverage for his or her LDA for that same 18 month period. If the employee does not elect COBRA coverage, the LDA may not make a separate election to continue his or her coverage. In addition, an employee on COBRA may add an LDA in the same manner as is permitted for active employees with spouses. However, should the employee die or become Medicare entitled or should the LDA relationship end, the LDA may not make an election under COBRA as a second qualifying event.