Group Life Insurance:
Eligible employees (those employed 35 hours or more per week in a covered position) participate in a group term life insurance and accidental death and dismemberment insurance program through the Virginia Retirement System. The School Board paysthe total premium for this benefit. The life insurance coverage amount is equal to two times, and in the case of accidental death, four times the next highest thousand dollars above your annual salary.
Minnesota Life Insurance Company is the current provider of all life insurance benefits administered by VRS.
Taxation of the Life Insurance
Life insurance coverage in excess of $50,000 is considered a “taxable fringe benefit” according to the IRS.Employees with coverage amounts under the basic group life plan that exceeds $50,000 will be subject to a federal, state and RICA tax withholding on the imputed income (defined as wealth from non-cash sources). This imputed income is based on a table provided by the IRS which takes into consideration the amount of insurance and the age of the employee.
Optional Group Life Insurance:
The Virginia Retirement System gives you the option to purchase additional life insurance for yourself, your spouse, and/or your minor dependent children. You can purchase the optional group life coverage for one, two, three, or four times your salary, not to exceed $700,000. The employee is responsible for the premiums through payroll deduction.