DePaul University 2008

1. DePaul University 2008 Second Domiciled Adult Benefits

2. Second Domiciled Adult Coverage at DePaul University - History • Pre-2005:On-going conversation between faculty members and university administration regarding the expansion of health benefits to domestic partners • 2005:President makes expanded medical coverage for uninsured members of employee’s households a priority • 2006:Faculty / staff survey finds widespread desire for the university to expand benefits to domestic partners • 2007:DePaul implements Second Domiciled Adult medical coverage with broad eligibility rules • 2008: 43 unrelated SDAs, 16 related SDAs and 4 SDA children covered by DePaul’s medical plans

4. Medical Benefit Plan Eligibility Rules • Spousesof Eligible Employees • person of the opposite sex to whom the employee is legally married under federal law. • Dependent Children of Eligible Employees (Applicable to Health Plans) • unmarried; • under the age of 23 (coverage continues to the end of the month in which age 23 is reached); • the employee’s natural born, adopted or placed for adoption (placed permanently with the employee for adoption) child, stepchild, or a child for whom the employee is the court-appointed legal guardian, or the employee’s disabled child of any age; and • meet the IRS criteria for tax-favored health benefits - generally a child must meet the IRS qualifying relative or qualifying child rules under Section 152 (without the income limitation).

5. Medical Benefit Plan Eligibility RulesMedical benefits can be extended to an SDA if the employee is not covering a spouse under the DePaul medical plan An SDA of a covered employee can be either: • a Related Second Domiciled Adult; or • an Unrelated Second Domiciled Adult (additional tax considerations) Note: Eligible children of covered SDAs may also be enrolled

6. Eligible Related Second Domiciled AdultAn adult member of the employee’s household who meet all of the following criteria: • is the employee’s relative including parent, son, daughter, grandchild, great grandchild, grandparent, great grandparent, brother, sister, half-brother, half-sister, uncle, nephew, niece, mother-in-law, father-in-law, step-parent, step-children; • is at least 18 years of age prior to the effective date of the coverage; • has shared the employee’s principal residence at least 6 months prior to the effective date of the coverage; • does not have other group health insurance; • is not eligible for Medicare or Medicaid; and • meets the criteria for tax-favored health benefits under the Internal Revenue Code.

7. Eligible Unrelated Second Domiciled AdultAn adult of the same or opposite sex of the employee who meet all of the following criteria: • is not related to the employee in any way that would prohibit marriage; • is not legally married to any person; • is at least 18 years of age prior to the effective date of the coverage; • has shared the employee’s principal residence at least 6 months prior to the effective date of the coverage; • has a close personal relationship with the employee (not a casual roommate or tenant) that is intended to be permanent; • shares with the employee a mutual obligation of support and responsibility for each other’s welfare; • does not have other group health insurance; and • is not eligible for Medicare or Medicaid.

8. Eligible Children of Second Domiciled AdultsThe child of an covered SDA who meets all of the following requirements: • Is unmarried; • Is under age 23 (coverage continues to the end of the month in which age 23 is reached); • Is the SDA’s natural born, adopted or placed for adoption (meaning placed permanently with the SDA for adoption) child, stepchild, or a child for whom the SDA is the court-appointed legal guardian, or the SDA’s disabled child of any age; • Has the same principal place of residence as the employee for more than six months of the year (temporary absences, such as for school, are treated as time at the same principal place of residence); and • Receives more than one-half of his or her support from the SDA or the employee.

9. Resources to Help You Determine Who Is Eligible: • Benefits Overview and How to Enroll Document • Summary Plan Descriptions (see the General Information Section of the Health Plans SPD) Both of these resources can be found on the Benefits Enrollment Page of the HR web-site at https://hr.depaul.edu

10. WHEN AN ELIGIBLE SDA CAN BE ADDED An employee may elect coverage for an eligible SDA during annual enrollment or within 31 days of one of the following events: • The employee and eligible SDA meet the 6 month cohabitation requirement; • The eligible SDA loses other group coverage due to change in employment, work site or income; or • The employee meets the 6 month waiting period for enrolling a new Unrelated SDA after having previously dropped coverage for an Unrelated SDA due to death or termination of the relationship.

11. Medical Plan Enrollment of SDAs During Annual Enrollment • Enroll yourself and your eligible children using the on-line Benefits Enrollment tool; 2. Contact the Benefits Helpline (x28232) to receive the Second Domiciled Adult Affidavit of Eligibility form; 3. Complete the affidavit, sign it, and submit it to HR along with appropriate documentation within 31 days of employment date; 4. Also submit a Declaration of Tax Status form if your Unrelated SDA or children of your Unrelated or Related SDA is eligible for tax-favored health benefits (otherwise SDA coverage has significant tax consequences).

12. Medical Plan Enrollment of SDAs Not During Annual EnrollmentWithin 31 days ofMeeting the Eligibility Requirements... • Complete the “Second Domiciled Adult: Affidavit of Eligibility” and • Submit the Affidavit to HR along with 2 recent documents showing that your SDA’s current address is the same as yours. • Submit the “Declaration of Tax Status” form to avoid additional taxation if your Unrelated SDA or children of your SDA qualify for tax-favored coverage. Your SDA and children of your SDA (as applicable) will automatically be enrolled in the same medical plan as you.

13. Taxation of Second Domiciled Adult Benefits Enrolling an Unrelated SDA or children of a Related or Unrelated SDA who do not meet the IRS criteria for tax-favored health benefits will result in... • Imputed income to the employee for the employer portion of the premium, and • After-tax employee premiums for the SDA portion of the coverage.

14. Taxation of Second Domiciled Adult Benefits Criteria for Tax Favored Health Benefits: An Unrelated SDA is eligible for tax-favored health coverage only if all the following requirements are met: • The SDA lives with the employee (shares a principal residence) for the full tax year, except for temporary reasons such as vacation, military service, or education; • He or she is a citizen or legal resident of the United States; • He or she isn’t anyone’s Section 152 qualifying child dependent; and • He or she receives more than half of his or her support from the employee.

15. Taxation of Second Domiciled Adult Benefits A child of an SDA qualifies for tax-favored benefits if he or she meets the IRS requirements for tax favored health benefits. The child must be an IRS... • Qualifying Child, • Qualifying Relative (without the income restriction)

16. Taxation of Second Domiciled Adult Benefits • Coverage for a Related SDA will automatically be on a tax-favored basis: Pre-tax contributions for the coverage of the related SDA and no imputed income; • Coverage for an Unrelated SDA and children of all SDAs will automatically be on a taxable basis unless the employee returns a completed Declaration of Tax Status; and • Tax status changes will be made on a prospective basis only.

17. Taxation of Second Domiciled Adult Benefits For those SDAs and children of SDAs who are not eligible for tax-favored health coverage, DePaul will: • Establish the fair market value of the health coverage; • Include this amount (less any after-tax employee contributions) in the employee’s income when determining income and payroll taxes; • Report the income on W-2s; and • Deduct employee contributions for the unrelated SDA and/or SDA’s children on an after-tax basis.

18. Taxation of Unrelated Second Domiciled Adult Benefits: PPO Premiums and Imputed Income

19. When SDA Coverage EndsAn employee may drop coverage for an SDA only during open enrollment or within 31 days of one of the following events: • The SDA ceases to meet the eligibility criteria • The SDA enrolls in other group coverage • The SDA becomes eligible for Medicare or Medicaid • The SDA dies

20. SDA Coverage Continuation in the Event the Employee Loses Benefits Only the employee may elect Continuation of Coverage for an SDA and must pay the full premium for continuation of coverage.

21. SDA Retiree Medical Eligibility • If an active employee retires and they are covering an SDA at the time of retirement, the SDA may continue to be covered as long as they meet the Plan’s eligibility requirements. • Once an SDA becomes eligible for Medicare, he or she is no longer eligible for SDA medical benefits. • The retiree must pay the full cost of the SDA’s coverage regardless of the employee’s grandfather status under the terms of the retiree medical plan.

22. To Learn More About Your Plans* Read the Summary Plan Descriptions... DePaul University Health Plans (Medical, Dental, and Vision) • General Information Section (eligibility, coverage begin and end dates) • Administrative Section (Claims Filing, Appeals, ERISA and COBRA) • Medical Plans Details, Dental Plan Details, and Vision Plan Details DePaul University 403(b) Retirement Plan DePaul University Group Life Insurance; DePaul University Group Total Disability Insurance; and DePaul University Flexible Spending Program The SPDs can be found on the HR website at https://hr.depaul.edu. *The SPDs are in printable .pdf format. If you require a printed version of any SPD and are unable to print them you may request a printed copy by contacting the Benefits help line at 28232.