State of Iowa employees who work at least 1040 hours/year, have the option to pay their share of health, dental and supplemental term life insurance premiums with pretax* dollars. Employees are automatically enrolled in this plan and may elect out of the plan. Participating in the Premium Conversion Plan helps you...
- Decrease taxes
- Increase net take-home pay
The term pretax, for purposes of the Premium Conversion Plan, means "before federal, state and FICA taxes". Your pretax premium amount will reduce the amount of wages reported to social security. The effect on your social security benefit will be proportional to the amount of total pretax premiums you pay.
|Example: a $504 tax savings in one year||No Premium Conversion||Premium Conversion||Savings|
|Expenses run through Premium Conversion||0||(-$1,800)|
|State Income Tax*||(-1,926)||(-1,830)||96|
|Income After Taxes||$25,920||$24,624|
|Expenses after taxes||(-1,800)||0|
|Your Spendable Income||$24,120||$24,624||$504|
This employee reduced taxes by $504 by utilizing the Premium Conversion benefit!
* Based on estimated federal tax of 15% , state tax of 6%, and FICA of 7.65%
All state employees hired after May 1989 are automatically enrolled in the Premium Conversion Plan. If you initially elected to opt out of this benefit and wish to participate, you may do so during the fall enrollment and change period or with in 30 days of a qualifying life event
To enroll, you must complete a pretax Premium Conversion election form and submit it to your Human Resources Associate.
- within 30 days of hire
- within 30 days of a qualifying change in family or employment status
- during the benefits open enrollment period each fall
Your Premium Conversion Plan election can only be changed during the annual benefits open enrollment period or within 30 days of a qualifying life event such as:
- Birth/adoption of a child
- Change in spouse's employment
- Loss of dependent(s)
To request a change, complete the Premium Conversion election form and forward it to your Human Resources Associate.