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 which 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.

To define excess life insurance rates

Access Group Life W-2 Table (BN00.4).
Select the Company.
Type the current amount of excludable life insurance for employee and dependent life. The cost of group life insurance in excess of this exclusion must be reported as income to the employee.
Type the dollars of coverage on which the cost of insurance is based.
Use the following guidelines to enter field values:

Age

For each premium rate, type the starting age. The application will calculate the ending age.

Cost

Type 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.