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Paying for benefits

Find out your options for paying for your PEBB benefits.

What does my employer pay? 

Your employer pays a portion of the medical premium and all of the premiums for dental coverage for you and your dependents. Your employer also pays the premiums for basic life insurance, basic AD&D insurance, and employer-paid long-term disability insurance. You pay nothing for these benefits. 

What do I pay?

You pay a monthly medical premium for yourself and any enrolled dependents on your account. Your medical premiums pay for a full calendar month of coverage. Your medical premium and life insurance premium cannot be prorated for any reason, including when a member dies before the end of the month. LTD premiums may only be prorated the month an employee enrolls if they are required to submit evidence of insurability.

See medical premiums to see how much your monthly premiums will be. Note: If you are an employee who works for a city, county, port, tribal government, water district, hospital, etc., or a non-represented educational service district employee, contact your payroll or benefits office to get your monthly premiums.

In addition to your monthly medical premium, you may be charged a $25-per-account tobacco use premium surcharge and/or a $50 spouse or state-registered domestic partner coverage premium surcharge.

You are responsible for paying any out-of-pocket costs for deductibles, coinsurance, or copayments for services under the medical and dental plans you choose.

You can buy supplemental life and supplemental AD&D insurance for yourself and your eligible dependents. You will be automatically enrolled in employee-paid LTD insurance, although you can reduce to a lower-cost coverage level or decline the coverage at any time. If you later decide to enroll in or increase coverage, you will have to provide evidence of insurability and be approved by the insurer.

How to pay for coverage

Eligible state agency and higher education institution employees may pay medical premiums and applicable premium surcharges with pretax dollars from their salary under the state’s premium payment plan. The premium payment plan is part of the Salary Reduction Plan under the Internal Revenue Code Section 125. See WAC 182-12-116 for more information.

If you are not a state agency or higher education employee, ask your payroll or benefits office if they offer a pretax deduction benefit under their own Section 125 plan. 

Premiums and applicable premium surcharges are automatically deducted from your paychecks pretax, unless you request otherwise.

Why would I pay my monthly medical premiums with pretax dollars?

Paying your premiums pretax allows you to keep more money in your paycheck because the premium, applicable premium surcharges, and/or contributions are deducted before taxes are calculated. This reduces your taxable income, which lowers your taxes.

Do I need to complete a form to have my medical premiums withheld pretax?

If you are a new employee enrolled in PEBB medical and your employer offers this benefit, your payroll or benefits office will automatically deduct the premiums before calculating taxes.

Are premiums for all my dependents withheld pretax?

If you enroll a nonqualified tax dependent (such as a state-registered domestic partner, their child, or an extended dependent), submit a Declaration of Tax Status form to indicate whether they qualify as a dependent for tax purposes under IRC Section 152, as modified by IRC Section 105(b). If your dependents do not qualify as your tax dependent, their monthly medical premiums will appear as posttax deductions from your paycheck. However, you will be able to make premium payments for your own insurance coverage with pretax deductions.

How do I pay the premium surcharges?

If your premium and applicable premium surcharges are automatically deducted from your paychecks, the deductions will be taken before taxes unless you request otherwise. Exception: If you enroll a state-registered domestic partner and they do not qualify as an Internal Revenue Code Section 125 dependent, then the $50 monthly spouse or state-registered domestic partner coverage premium surcharge (if it applies to you) will be a posttax deduction from your paychecks.

How to opt out of pretax payments

Submit a PEBB Premium Payment Plan Election/Change form to waive (opt out of) participation in the premium payment plan no later than 31 days after you become eligible for PEBB benefits (Your eligibility date is generally the first day of employment; check with your payroll or benefits office). See WAC 182-12-114 for more information.

Can I change my mind about having my medical premiums withheld pretax?

You may change your participation (enroll or opt out) during annual open enrollment or when a special open enrollment event occurs as described in WAC 182-08-199.

Choosing not to have a pretax deduction

If you have your medical premiums deducted pretax, it may also affect the following benefits:

  • Social Security—If your base salary is under the annual maximum, participation in the premium payment plan reduces your Social Security taxes. However, your lifetime Social Security benefit would be calculated using the lower salary.
  • Unemployment compensation—Participation in the premium payment plan also reduces your base salary used to calculate unemployment compensation.

To comply with a federal or state mandate, your employer may also remove you from the premium payment plan, with notice, to prevent excess tax deferral.