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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5975
Experience:  35 years tax experience, including four years at a Big 4 firm.
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The questions is about health benefits withdrawals. My last

Customer Question

The questions is about health benefits withdrawals. My last day is 9/5/2019 and as I am aware the company is allowed to withdraw the money from my paycheck, but are they allowed to withdraw the full month amount not just the part of amount of the month even though I’m being pick up by the other company on 9/9/2019? I get ducted let’s say $600 a month but on each paycheck it comes out to be $300.00. Are they allowed to deduct the full $600 amount on my last check paycheck which is on 9/6/2019?
Submitted: 1 month ago.
Category: Tax
Expert:  PDtax replied 1 month ago.

Hi from Just Answer. I'mCustomer and can assist.

Expert:  PDtax replied 1 month ago.

They are allowed to withhold in this manner. This happens a lot in the last month of employment, as you are paying for a full month of insurance coverage from the last payroll checks due you.

Final checks for unpaid sick pay, holidays, etc. are considered non-payroll payments for these purposes. Since you did not agree when you enrolled to pay for insurance from these benefits, they are typically not withheld from the payment for unused vacation, sick pay, etc. And, since you are leaving their employ, making arrangements like offering to repay them once you start the new job is simply not workable. Former employees are very likely not to pay for such benefits after leaving a job.

You can't prorate your insurance coverage for September between your old employer plan and new one, either. The two companies aren't aware of the change in employment. You could defer enrollment in the new plan until October if that helps, but often enrollment must start in the new job when you start work. Insurance eligibility and all that. I suspect you have to enroll in all your employee benefits, like 401(k), cafeteria plan, etc. when you start the new job.

This is one of those costs of changing jobs. I suspect you could have two different insurers covering you for September, and if you need to make a claim, they would have to negotiate which carrier would pay for your claim.

Your former employer has to abide by your wishes, which is to have them withhold for health insurance until you don't work there any more.

I hope that clarifies things for you. Positive feedback, five stars please, is appreciated after review. I'mCustomer

Customer: replied 1 month ago.
Perfect thank you for verifing that.
Expert:  PDtax replied 1 month ago.
You're welcome. Can I ask you to rate with positive feedback to complete your request? Five stars is best.