Defining Excess Life Insurance Rates

You define parameters to calculate an employee's tax liability for excess employee and dependent life insurance. The parameters include the excludable coverage amount and a monthly costs table. The IRS determines the monthly cost table that is subject to change. You must maintain the monthly cost table every year.

The Benefits Administration application uses the values you define in conjunction with information in each life insurance plan to determine which employees and dependents have excess life insurance, and to calculate the cost of excess life insurance.

Access Group Life W-2 Table (BN00.4).
Select the Company.
Specify the current amount of excludable life insurance for employee and dependent life. You must report the cost of group life insurance in excess of this exclusion as income to the employee.
Specify the dollars of coverage on which the cost of insurance is based.
Specify this information:

Age

For each premium rate, type the starting age. You can use the application to calculate the ending age.

Cost

Specify the monthly cost of excess life insurance. The cost is for the increment of coverage defined in the Monthly Cost Per field, which is dictated by the IRS.