How much Life is Excess Life?
The question may conjure images of "death panels" (credit to Sarah Palin for adding that phrase to the political landscape in 2009) but the real answer is far less sinister. Excess Life is the description of an earnings code used in the payroll system at Mayo Clinic. So you might wonder, why does this code/description appear on my paycheck? The solution lies in the generous amounts of life insurance that Mayo Clinic provides for benefit-eligible employees (three times annual salary) and the Internal Revenue Code.
The IRS limits the amount of life insurance that an employer can provide for an employee before the coverage has to be considered as part of their taxable compensation. Life insurance coverage up to a $50,000 benefit is tax exempt. Any life insurance amounts over $50,000 in coverage are considered taxable compensation. So, the premium that Mayo Clinic pays for your life insurance coverage (over the first $50,000) must be added to your paycheck so that you can pay regular payroll taxes on that premium amount. After the taxes are calculated, the premium amount is deducted back out, but in the process you will have paid taxes on the amount of the premium.
Is the Palin reference really needed?
No. However, it is factual and it was intended to add humor and relatability to an otherwise unengaging topic. Please accept my apologies if I failed in that effort.
Factual as it may be, so much of our daily lives has become a raging, hyperventilating hyperbole. Regardless of one’s political stance, snarky political humor has no place in this type of forum, even if that forum is akin to watching paint dry. Thanks for the reply.