Pre-tax premium conversion is a flex plan benefit that allows exclusion of your Medical, Dental and Vision premiums from your taxable income. By electing this, you convert your premium deductions from after-tax to pre-tax. This reduces your taxable income reported on your W-2, thereby reducing the amount withheld from your paychecks for Federal, State and FICA (Social Security/Medicare) taxes. Individual savings will vary based on your income, number of exemptions and your tax bracket.
Default Pre-tax effective January 1, 2021.
Effective 1-1-2021, all employees enrolled in Medical, Dental and Vision will have their premiums deducted on a pre-tax basis. This is a UA System requirement, in anticipation of the conversion to the new Workday system. This will not affect the majority of employees who already pay their premiums on a pre-tax basis. Those currently paying these premiums on a post-tax basis will automatically be changed to pre-tax starting with the first paycheck of 2021.