The employee's insurance deductions occur in the month they are receiving insurance coverage.
Those on a semimonthly pay frequency will see their medical, dental, and/or vision deductions split evenly over their two regularly scheduled paychecks in any given month. For example, if both the 15th and 30th of April fall on normal business days, the first half will be deducted on their April 15th payment and the second half will be deducted on their April 30th payment.
Since employees who are paid on a biweekly pay frequency are paid twenty-six times per year, and not twenty-four, there will be certain months in which they are paid three times. In the event that there are 3 biweekly paydays in a given month, employees will see deductions for the first half of premiums on the first paycheck of the month and will be billed for the second half of premiums on the first paycheck after the 15th of the month.
Lastly, employees who are paid on a weekly pay frequency will see their deductions split evenly and taken from the first paycheck of the month and the first paycheck after the 15th of the month.
To summarize, the employer pays the full cost of insurance upfront during the month prior to coverage and the employees contribute during the month their coverage is active.
Optum Financial Commuter Billing
Your commuter benefit from Optum Financial will be billed on the first pay cycle of the month if you are paid semi-monthly or bi-weekly. If you are paid weekly you will see deductions on your second payroll of the month. The total amount is deducted based on the plan for which you enroll. For pre-tax, your gross pay is deducted from the amount of the plan and then taxes are applied to the remaining gross amount.
Optum Financial HSA/FSA Billing
Your HSA deductions from Optum Financial will be billed on the second payroll of the month. FSA deductions from Optum Financial will be billed on each payroll. The amount that is deducted will be based on your yearly contributions broken out into even payments for the remainder of the year.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.