[1]What a special day! Palm Sunday [2] and April Fools’ Day! Just know that if someone throws you a curve, be ready for an April fools’ joke. Since playing pranks is not a typical activity in our household, this day usually occurs without incident. However, I never know what a day may bring. 😉
Last week, we began the next category in organizing our important documents. I began the tax-favored programs’ category with Health Savings Account (HSA) documents [3]. Having had an HSA in the past, I kept those documents within this sixth file opening. Today, I will continue with this category focusing on the documents within this file slot now.
Summary Page
At the beginning of each category, I include a summary page [4] with details on these accounts. Since I no longer have HSA documents, I place this summary page first which is before the pre-tax group insurance premium documents.
Pre-Tax Group Insurance Premium
Defined
Our pre-tax group insurance premium allows us to pay our health, dental, vision, and life insurance premiums with pretax dollars. When enrolled, our insurance premiums get paid first. Then the tax calculation runs the remaining paycheck amount before deducting the proper tax amount.
By paying our insurance premiums with pre-tax dollars, we get the tax benefit immediately. No forms or calculations need to be kept for tax preparation. What a great benefit!
Cost
With Paul’s current employer, we have the choice of accepting or rejecting this option. Since I cannot imagine rejecting this option, we accept it at a cost of $.12 per month or $1.44 annually, deducted before taxes. For us, the cost is minimal compared to the hundreds of dollars we save each year.
Our pre-tax group insurance premium provider offers the pre-tax option and the spending accounts: medical and dependent care. Though the one insurance company provides all three types, we can choose to enroll in none, one, two, or all three of these benefits.
At Paul’s previous employer, the pre-tax group insurance premium was an automatic benefit to us at no cost. Each business operates differently. If you are not sure if you have this option, you can contact the benefits’ administrator through the issuing employer for answers.
Documents
In my file, I have these following items housed behind our summary page:
1. Confirmation Notice of enrollment in the pre-tax group insurance premium feature
2. Brochure detailing the insurance premium feature
3. Privacy practices of issuing insurance company
Keeping these documents together and housed in the same file opening as the spending accounts, I can quickly find the information if a problem arises.
In using time wisely, I researched the pre-tax group insurance premium option and discovered that the benefit was worth the annual $1.44 cost for our family. As you organize your important documents, consider reviewing your options. You might be missing benefits that will save you hundreds of dollars. Happy organizing!
Question: Do you have access to a pre-tax group insurance premium?