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  1. #11
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Federal Grant, Spousal Benefits

    Here's something for you to think about.

    As I said, while I know nothing about grant management, I do have employees who are paid on grants and for whom there is an amount that is specified to her health insurance. I think that is most likely quite standard when the employee is paid by the grant. I submit that it would be illegal for the employer NOT to apply that to the portion of the the insurance policy that covers her, regardless of who is listed as the subscriber, as anything other than that would be to be using those funds for a purpose other than intended. Why do you think it matters whose name is listed as subscriber? It's her insurance just as much as it is yours.

  2. #12
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    Quoting the law I posted above:
    2 CFR Part 200 - UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

    2 CFR 200.431 - Compensation - fringe benefits.:

    (a) Fringe benefits are allowances and services provided by employers to their employees as compensation in addition to regular salaries and wages. Fringe benefits include, but are not limited to, the costs of leave (vacation, family-related, sick or military), employee insurance, pensions, and unemployment benefit plans. Except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, non-Federal entity-employee agreement, or an established policy of the non-Federal entity.
    Regarding the law above:
    Is their action reasonable? Yes, I think so.
    Is it required by law? No, they are not required to take the prorated portion out of the grant. They could pay for it themselves as they had before employing my wife.
    Is it required by an employee agreement or established policy? I don't see any evidence of such a policy existing, but it may.

    The questions are:

    1) Does this allow using grant funds to reimburse the employer for fringe benefits allocated to another employee who is unrelated to the grant.
    2) What if we declined to disclose our marital status? What legal access to that information does the employer have?


    To look at the situation in another way: If we had children, and were still on my fringe benefit plan, would they then justify taking additional funds out of the grant to cover part of their cost for insuring the children? If they can do this, then what is stopping them from taking the entire amount out of the grant? It is certainly to their cost benefit to do so.

    This depends on how we fill out our fringe benefit paper work. If this is justified, why shouldn't they be able to justify reimbursing themselves for the full amount? If we were on my wife's fringe benefit plan, then the full amount would be taken out of the grant. Or in that case would they only be able to justify taking out half?

  3. #13
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Federal Grant, Spousal Benefits

    In the background, at least where I work, the amount the employer pays for any benefit is added into the total cost of having that employee and is part of the compensation review process. You could look at it as it lowers your total cost and therefore makes you a more valuable employee to them over someone that doesn't have this situation.

    Fringe benefits are never going to be equal for everyone based on the fact that different employees choose different coverages and get more of a benefit than others. Your right, unless the employee is paying 100% of the dependents costs, someone with children might be getting more of a benefit than you are. Another example would be 401k employer match. Generally you have to participate to get the match or to get any match over the safe harbor (if the plan is a safe harbor plan). Employees miss out on lots of fringe benefits because of either personal choice or eligibility. That's just the way benefits work.

    Not all policies are published for some of the very reasons you are asking the questions. That doesn't make them wrong or illegal. If they change it to the way you think it should be, then someone else will have a problem with that. In the end they have to make some policy/decisions on how to deal with special situations.

    The best you can do is to see which way works better for you and your spouse to maximize your benefit.

  4. #14
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    Thanks for the comments.

    I don't think the actual details of the issue have quite been addressed yet though. The question is whether or not the employer is allowed to take funds from a federal grant for the express purpose over reimbursing fringe benefit expenses allocated to a non-grant-employee for which a grant-employee is the ultimate material beneficiary.

    It may be possible that the employer has a policy allowing that, however it seems like an obscure enough situation that it was simply an accounting decision made without consulting any actual established policy.

    Alternatively, if my wife was employed first, then the employer would likely have been taking the full cost for the plan out of the grant. (Or would they only been able to justify taking out the portion of the cost which was for the actual employee?) In this case, later on, when I am hired, would they then have to start covering half of the cost?

    *Moderators: The edited title misrepresents the question.

    Can we change it to: "Can an employer take funds from a federal grant to cover fringe benefit expenses for which the employee is a dependent beneficiary?"

    That's about as succinct that I can put it...

  5. #15
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Federal Grant, Spousal Benefits

    There is nothing inherently illegal about what is being done.

    To carve an answer for you in stone, one would have to be familiar with ALL the terms of the grant. Which none of us, including you, are.

  6. #16
    Join Date
    Mar 2017
    Posts
    8

    Default Re: Federal Grant, Spousal Benefits

    True! However, nothing is inherently illegal!

    Certainly, I have little to no knowledge about the entire issue here. However, the discussion has helped give me things to think about, and at least finding the relevant laws basically solves the issue. We just have to determine what the employer's established policy is... unless if there is a law that supersedes the one quoted above.

    Of course, I'm no lawyer, so there could be innumerable things I am missing...

  7. #17
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,521

    Default Re: Federal Grant, Spousal Benefits

    Actually, you do not have to do anything at all. How funds are managed and transferred behind the scenes has nothing at all to do with you.

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