The Empire Plan is a unique health insurance plan designed especially for public employees in New York State. Empire Plan benefits include inpatient and outpatient hospital coverage, medical/surgical coverage, Centers of Excellence for transplants, infertility and cancer, home care services, equipment and supplies, mental health and substance abuse coverage and prescription drug coverage.
ANDREW M. CUOMO
Governor
LOLA W. BRABHAM
Acting Commissioner
PE20-06
PA20-07
PAEX20-06
TO: PA and PE Health Benefits Administrators
FROM: Employee Benefits Division
SUBJECT: Domestic Partner Imputed Income
DATE: June 4, 2020
As a reminder, Participating Agencies (PA) and Participating Employers (PE) that have elected to offer domestic partner coverage will be responsible for their own imputed income reporting, regardless of the employment status of the enrollee.
Under Internal Revenue Service (IRS) rules, the fair market value cost of coverage for a domestic partner may be taxable. The fair market value of domestic partner coverage is the full share cost of Individual coverage, less the employee’s share of the premium for dependent coverage. This amount, referred to as imputed income, is considered by the IRS to be additional income for the enrollee.
Imputed income is additional taxable income based on the fair-market value of a non-federally qualified dependent’s coverage. It is not an additional amount added to the premium paid, as is a common misunderstanding. The amount of taxable income reported on an enrollee’s W-2 or 1099 form will be increased by the fair market value of the coverage.
Imputed income for domestic partners of enrollees and retirees must be calculated and provided to the enrollee by the employer. The Employee Benefits Division will not calculate the imputed income for PAs and PEs.
Questions regarding your imputed income reporting responsibilities should be directed to your agency’s tax advisor.