Benefits-related FAQs for Reduced FTE Schedule Employees (HR105)
Below are some frequently asked questions related to benefits and time-off accruals during a Reduced FTE Schedule Leave of Absence:
Q: How will employees pay for their elected benefits during their months off without pay?
A: Employees will be sent invoices with the total balance listed for elected benefits in any pay period for which the employee is not paid or does not have enough earnings to cover their benefit deductions. Payment details will be included on the invoice. Any balance remaining upon the employee’s return to work will be deducted from their pay through the arrears process and until the balance is zero.
Q: How will the employee’s elected benefits cost be calculated during their months off?
A: The charge for all elected benefits will be at the established employee rate for the Reduced Workweek Leave of Absence and Leave in Lieu of Layoff. These rates are the rates the employee is paying at the time of their leave beginning. Refer to the latest paystub for these rates.
Q: What is the arrears process?
A: Arrears is the amount of money accrued from missed benefit deductions due to lack of earnings in a payroll period. These monies are due to the University for the pay periods missed. If this balance remains unpaid upon the employee’s return to work, the balance will be deducted from the payroll received until the balance is zero. These deductions will be deducted at the rate of one additional benefit deduction in addition to the current deductions. This could result in a zero pay for the employee depending on the benefit premium costs and hours worked in the payroll period.
Q: Is it possible for the employee to pay for benefits on a pre-tax basis during their months off?
A: Benefit contributions billed directly to employees during months off will not be deducted on a pre-tax basis. If an employee does not pay their benefits during the leave and returns to work, the arrears are deducted on a pre-tax basis beginning with the first payroll upon return.
Q: Is it possible for the employee to pay for premiums from either an FSA or HSA account to take advantage of the pre-tax benefit?
A: Employees are not able to pay for health care premiums with HSA or FSA dollars due to restrictions placed on such funds.
Q: What happens to the employee’s FSA account during their months off?
A: During an unpaid leave of absence, the contribution goes into arrears and the employee is billed for these missed deductions. When the employee returns to a paid status, deductions will resume as long as they are still enrolled in the plan. Yearly pledge and actual contribution will equal if the employee has been in an unpaid status.
Q: What happens to the employee’s HSA account during their months off?
A: During an unpaid leave of absence, the contribution does not go into arrears and the employee is not billed for these missed deductions. When the employee returns to a paid status, deductions will begin as long as they are still enrolled in the plan. Yearly pledge and actual contribution will not equal if the employee has been in an unpaid status.
Q: What happens if the employee does not pay for their benefits during their month(s) off?
A: Employees have up to 120 days to pay their benefit balance prior to the balance being sent to a collection agency. If payment is not received during this time, then benefits could be terminated at the end of the 120 day period. If the employee returns to work within 120 days, the balance due will be collected through the arrears process once the employee begins receiving pay. During this time, the employee will never have more than two deductions for each benefit per pay; however, this could result in a zero pay. This will occur until the arrears balance is zero.
Q: Who should employees contact with questions regarding their benefit billing?
A: Questions concerning benefit billing and balances during the period of time of no work or upon return to work, should be directed to the Penn State Human Resources’ Absence Management team.
Q: For the Dependent Care FSA, can employees increase this upon their return to have the full amount that was elected at the beginning of the year?
A: Employees can increase their contribution amount upon their return to work; however, per the IRS, in order for the employee to be eligible for the Dependent Care FSA, both parents must be actively at work. Therefore, during a leave, these funds are not accessible to the employee.
Q: For an HSA, is there a form or process in Workday to update the contribution amount during the paid periods to make up for the months of no pay?
A: For the HSA, contributions can be changed at any time during the course of the year. This process is done directly through Workday and employees can refer to the knowledge base article in WorkLion or contact HR Shared Services (814-865-1473) for assistance.
Q: Will employees have access to their FSA and HSA accounts during their leave period or unpaid month(s)?
A: Employees will always have access to their HSA dollars as they are employee-owned dollars the minute they hit the account. For an FSA, employees are allowed access to their full annual election during their leave.
Q: Will employees who are on leave be charged for their parking pass?
A: Employees should contact their unit’s facilities and parking representative to discuss matters related to parking.