Employee is Not Being Paid a Wellness Reimbursement

My question involves labor and employment law for the state of: California

On my paystub it shows that my employer is paying me a wellness reimbursement of $272 under my earnings. the $272 is counted in my gross pay but i do not recieve that $272 in my net pay. Is this legal??

Quote:

---

Quoting Notxreimbursed

---

My question involves labor and employment law for the state of: California

On my paystub it shows that my employer is paying me a wellness reimbursement of $272 under my earnings. the $272 is counted in my gross pay but i do not recieve that $272 in my net pay. Is this legal??

---

Can you describe the "wellness reimbursement" a bit more? Much will depend on the details.

actually i dnt know because i never signed up for any health plan or anything like that whatsoever..

almost $5,000 00 has been added to my ytd earnings under "wellness reimbursement". shouldn't i be recieving this $ since its showing up under my earnings and being taxed?? More so, i was looking at my year end check stub for 2016 and it says i made almost $22,000.00 last year and my W2 form states that i only made $17,000. thats exactly -$5,000 just like this year. To top it all off i never signed up for any healthcare plan through my employer.

When you asked Payroll to explain this entry what did they say?

i havent asked them yet.. i barely started looking into these matters within the last week. Im going to go down to the office and speak with HR This morning. I wanted a 3rd party opinion before i went in to talk with them. So at least i kinda know what im talking about and to know what their response could possibly be.

Quote:

---

Quoting Notxreimbursed

---

i havent asked them yet.. i barely started looking into these matters within the last week. Im going to go down to the office and speak with HR This morning. I wanted a 3rd party opinion before i went in to talk with them. So at least i kinda know what im talking about and to know what their response could possibly be.

---

Because this is an odd sort of situation, and because there are at least several different answers we could give you based on the information you've provided us, we really need to know what Payroll says before we can give you more information. So go to Payroll, see what they say, and if you have more questions, come back here (and tell us what Payroll said, of course).

There's no way for us to know based on the little information we have. When you've got the explanation from Payroll or some other representative of your employer, come back and tell us what it is and we can go from there. It sounds as if you're being imputed income for some reason. It might be legit; it might not. It might be a mistake and you only have to bring it to their attention. But the FIRST place to go is the source, not a third party.

agree that it sounds like an imputed income calculation - which means you are being taxed on the amount of some benefit that isn't given to you in cash wages. But there is no way for us to tell you what it is.

Do you have a company car? Do you have a gym membership? etc

Only your payroll/HR can know the answer so talk with them. Next time, ask them the first or second time it happens rather than waiting until year-to-date is $5k...if it is a mistake, it's easier to correct the earlier it is found!

thnx for the feedback.. i will let you guys know when im done talking to her.

Quote:

---

Quoting Notxreimbursed

---

shouldn't i be recieving this $ since its showing up under my earnings and being taxed?? More so, i was looking at my year end check stub for 2016 and it says i made almost $22,000.00 last year and my W2 form states that i only made $17,000. thats exactly -$5,000 just like this year.

---

Your employer is probably putting money into an HSA account. The numbers you quoted for 2016 strongly suggest this, and "no" you're not being taxed on it, yet.

Quote:

---

Quoting chyvan

---

Your employer is probably putting money into an HSA account. The numbers you quoted for 2016 strongly suggest this, and "no" you're not being taxed on it, yet.

---

Wouldn't OP need to be on a high deductible/catastrophic health insurance plan if that were the case?

Quote:

---

Quoting Notxreimbursed

---

i never signed up for any healthcare plan through my employer.

---

He probably does and just doesn't know it. My employer enrolled everyone in the "free" policy with an HSA deduction even if an employee selected nothing. The only way to have nothing was to affirmatively reject it. The OP just says he didn't sign up for one (not that he rejected it) so I'm thinking he got it by default.

Yes. By IRS regulation, an employee cannot participate in an HSA unless he is also enrolled in a High Deductible Health plan. The poster indicated that he is not enrolled in a health plan through the employer at all.

And HSA's aren't funded by imputed income anyway. They would show as a pre-tax deduction, not as something added into the gross wages.

The numbers quoted do not even come close to "suggesting" this, let alone strongly. The 2016 HSA limit for individuals was much less than $5000 and the limit for families was over it. There is no significance to $5000 with regards to HSA's.

Did I mention that I do employee benefits for a living and deal with HSA's every working day?

Quote:

---

Quoting chyvan

---

He probably does and just doesn't know it. My employer enrolled everyone in the "free" policy with an HSA deduction even if an employee selected nothing. The only way to have nothing was to affirmatively reject it. The OP just says he didn't sign up for one (not that he rejected it) so I'm thinking he got it by default.

---

I'm thinking that for the reasons I just defined above, you're talking out of your ass again.

But if he had an HSA, he would be getting monthly statements or communications on how to spend it and what the balance is. I'd be VERY surprised if this were an HSA contribution -- only because it would generally show on a paystub the same as 401(k) Employer Match since neither are part of Gross Income calculations in any payroll system I have seen or worked with.

And the 2017 limit on HSA contributions is $3400 for a single employee (employer contributions and employee contributions combined) so $5k+ for the year to date is not reasonable. It is $6250 for employee plus family, but the OP hasnt' stated if he has HDHP family coverage. And even then I don't know many employers who fund that high of HSA balances without making sure that employees know that they are.

but again, only his Payroll can explain their paystubs and we are all guessing.

Ok, so it's not an HSA and it's the wrong term. However, for 2011's open enrollment (that I didn't get to participate in), the employer started to contribute a flat $500 per month ($6,000/yr) for whatever health plan an employee wanted. If you had the lowest plan, there was money left over that we were told could be used to cover the deductible. I thought the money was going into an HSA, and you're convincing me I'm wrong (they were new). So what are those plans called?

Depending on the specifics, that MIGHT have been an FSA, which serves a similar purpose to an HSA but with different limitations. What happened to the money if it didn't get used, chyvan?

You said that was for 2011, right? $5000 was still applicable for an FSA in 2011. Shortly after that, the limit was lowered to $2,500 and it stands today at $2,650, but in 2011 $5,000 was still okay.

Quote:

---

Quoting cbg

---

Depending on the specifics, that MIGHT have been an FSA, which serves a similar purpose to an HSA but with different limitations. What happened to the money if it didn't get used, chyvan?

---

I don't know. It was all new, and I was gone before it started and never saw how the full implementation would have looked on a pay stub, how to make requests for reimbursement or if it was lose it or lose it.

I think the OP will probably have a lot more questions than just the one he asked, and will want to talk to a benefits person rather than someone in payroll.

That's possible. We go back and forth with Payroll all the time. We can answer questions about benefit deductions; Payroll can answer questions about taxes. Since the poster indicated that it was listed as wages and was taxed however, Payroll seems like a logical place to start. I'm sure someone in Payroll will be happy (more than happy, if they're like our Payroll) to refer him to someone in Benefits if that seems to be where it is originating after they review it.

i never signed up for an HSA plan with my employer. i waived everything. the only plan i have with my company is an employer paid 15,000 life insurance policy.

So what did they tell you the notation on your pay stub is?

I feel like we are playing BINGO......ugh!

I talk to the payroll specialist at my company's HQ. She told me that the ACL 125 deduction was a pre-tax deduction for the wellness program. And that even though $300 was deducted I we would receive a $272 cash reimbursement in my wages. Then that's what I told her that's where my problem is . It says on my pay stubs that I'm being paid this cash reimbursement in my earnings and it shows up in my total gross wages but not have I seen 1 penny of it in my net pay. When she heard that she's got really concerned and told me that she was going to look into it and that she would call me back by tomorrow.

I was enrolled into the Wellness program by default because i didnt opt out b4 the company deadline.

She also stated that the $27.50 minus the $300 deduction was the employee premium for the program..

Quote:

---

Quoting Notxreimbursed

---

I seen 1 penny of it in my net pay.

---

That may be appropriate. Imagine that your employer was paying your cable TV bill, and reporting it as pay to you. Of course you wouldn't get the money because the money was going to the cable company not you.

Quote:

---

Quoting Notxreimbursed

---

where is my employer sending the "payment" to

---

The Wellness people. Technically, you did sign up by not doing what was required to not participate. You are deriving the benefit of the service even if you didn't want it, knew you had it, or ever intended to use it. Hopefully, you can get your money back, but it won't be the $272/mo, but rather the $27.50/mo that was actually coming out of your pocket.

i spoke with one of my co-workers right now here at work about what was going on with my wages . He is also enrolled in our company's wellness program as well. I asked him if could look at one of his stubs since he is also a good friend of mine so of course he agreed. They are paying him his wellness reimibursement of $272.50 every pay period. all you have to do is compare our two pay stubs and the error is clear as day!!! so my employer owes me that back pay from February of 2016.

Then argue the matter out with Payroll. You've got a very long way to go before you have anything resembling a legal case.

Looks like Payroll thinks a mistake has been made and is looking into how to fix it. Wait 'til she gets back to you (like she said she would) and see what she says.

ok ive been going in circles with HR and payroll about this issue. my employer was deducting $300 from my wages every pay period under Acl 125 deduction on my pay stub for some Wellness plan i never signed up for . they were calculating my pay like so : GROSS WAGES -TAXES - $300 DEDECUCTION = NET PAY. So every pay period i was pay almost $400+ in deductions and taxes. i argued the point with my employer and i told them i have the paper work showing i waived the plan before ut began in 2016. Now HR Is Saying that they can do a acl 125 deduction reversal, can thet do that ?? the numbers they are giving me dont make sense at all

She said the reversal would work like this: they would pay me $4800 back which is the ytd deductions for 2017 minus $4360 that was "offset" under my earnings and then minus $2,141.30 due in taxes. resulting in a net pay.of $.0.00 Does that make any sense at all? Am i missing something??? i feel like im being robbed here am i right??

If they were doing it AFTER taxes as you state above there should be no tax due on the funds being reimbursed. The should be giving you $300.00 times the number of weeks they deducted.

If it was BEFORE taxes as I would think a 125 deduction should be they will have to deduct taxes.

Sounds like they were both adding it in and subtracting it out (4800-4360)and the difference owed to you would be the taxes paid on a (imputed)benefit you didn’t receive - not sure why they would be taxing you again.... so there is still some misunderstanding.

What she told me was wrong then and shes just giving me the run around so they wont have to pay me. Then theyre trying to punish me for it

i think they were "double dipping" have you ever heard that term related to this issue??