Taxable Health and Dental Insurance - Merit Staff

Children may be covered through the end of the calendar year in which they turn 26.  Coverage for unmarried children who are full-time students or disabled can continue as long as they continue in that status.

The Internal Revenue Service (IRS) has determined that if an employer allows employees to insure dependent children over age 26, there is a value that must be added to the employee’s taxable salary when reporting income earned on the annual W-2.  This imputed monthly income is based upon the following table.

2016 Additional taxable value by plan and number of dependents
Number of taxable dependents covered by the Family Plan of the select Insurance Plan 1 2 3+
BC/BS Program III Plus $476.31 $952.62 $1143.15
BC/BS Iowa Select $474.85 $949.70 $1139.65
Wellmark Blue Access $347.54 $695.08 $834.10
Dental $20.92 $41.84 $49.16

If the child is over age 26 and a tax dependent, there is no additional imputed income applied to the employee’s taxable salary.  The Benefits Office will send you a form to verify your dependent's status and continued eligibility to remain on your insurance.  The University Benefits Office will ask you to verify dependent eligibility on a periodic basis.

Also, please note that if you participate in the Health Care Spending Account program, you will not be able to submit any claims for a dependent age 26 and above unless they are your tax dependent