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Paying for benefits

Learn about the premium payment plan and  how to pay for your medical premium pretax.

What do I pay?

  • Monthly premiums. You pay a monthly medical premium for yourself and any enrolled dependents on your account. Your premiums pay for an entire calendar month of coverage. Your medical and life insurance premiums 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. 
  • Premium surcharges. In addition to your monthly medical premium, you may be charged a $25 tobacco use premium surcharge and a $50 spouse or state-registered domestic partner coverage premium surcharge.
  • Out-of-pocket costs. You are responsible for paying any out-of-pocket costs for deductibles, coinsurance, or copayments for services under the medical, dental, and vision plans you choose. See the Medical benefit comparison for a side-by-side comparison of common benefits and costs for services for each plan.
  • Supplemental and employee-paid insurance. You can buy supplemental life and supplemental AD&D insurance for yourself and your dependents. You will be automatically enrolled in employee-paid LTD insurance. You can reduce to a lower cost coverage level. You can also decline the coverage. 

What does my employer pay?

If you are eligible for SEBB benefits, your employer will pay the premiums for dental, vision, basic life, basic accidental death and dismemberment (AD&D) insurance, and employer-paid long-term disability (LTD) insurance

How do I pay for coverage?

Under Washington State’s premium payment plan, premiums and applicable premium surcharges are automatically deducted from your paycheck before taxes, unless you request otherwise. Internal Revenue Code (IRC) Section 125 allows your employer to deduct money from your paycheck before calculating federal withholding, Social Security, and Medicare taxes. Exception: If you enroll a dependent who does not qualify as an IRC Section 152 dependent (i.e., state-registered domestic partner or extended dependent), your medical premiums and applicable premium surcharges will be deducted from your paycheck posttax. 

If you do not want your SEBB medical premiums or applicable premium surcharges paid with pretax earnings, you may opt out by submitting the SEBB Premium Payment Plan Election/Change Form to your payroll or benefits office. You cannot do this in SEBB My Account.

Why should I pay my monthly 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.

Would it benefit me not to have a pretax deduction?

Deducting your premiums pretax may affect the following benefits:

  • Social Security. If your base salary is less than the annual federal taxable maximum, paying your premiums pretax reduces your Social Security taxes now. However, your lifetime Social Security earnings would be calculated using the lower salary, which lowers your Social Security benefit when you retire.
  • Unemployment compensation. Paying your premiums pretax also reduces the base salary used to calculate unemployment compensation. To learn more about IRC Section 125 and its impact on other benefits, talk to a qualified financial planner, tax specialist, or visit your local Social Security office.

Can I change my mind about having my premium payments withheld pretax?

You may change your participation under the state’s premium payment plan during the SEBB Program’s annual open enrollment or if you have an applicable special open enrollment event as described in WAC 182-30-100.