premium) deducted from their salaries before income taxes are calculated. Using the Pre-Tax method for premium payments, can reduce employee's taxable income, and through tax savings, lessen the impact of insurance cost on their take home pay.
Eligibility
The Pre-Tax Premium Plan is available to all employees enrolled in the Medical, Dental and Vision plans deducted through NMSU Payroll.Enrollment
At the time of enrollment in medical, dental and vision plans. Once Pre-Tax is opted, it will automatically apply to medical, dental, and vision premiums. The Pre-Tax Plan remains in effect during the employee's entire employment at NMSU:- unless declined during the open enrollment period, or;
- in response to a qualifying change in status.
Advantages
- Employee tax savings. Employees do not pay federal, (and in most cases state and local income taxes), Social Security and Medicare taxes on the Pre-Tax contribution amount. Unemployment and Worker's Compensation taxes (in some states) are based on employee's pay after Pre-Tax contributions.
- Lower taxable income. Reduces the amount of taxable income on your W-2.
- Reduction of NMSU Social Security and Medicare tax liability.
Disadvantages
- Social Security benefits may be reduced due to the lower compensation that is considered for calculating a Social Security benefit.
- Elections may only be revoked during a plan year due to a change in status or other changes permitted under the Treasury Regulations.