INCLUDES:
1. Evaluation Forms (Mahomet)
2. Are insurance benefits for disabled officers free? (Freeport)
3. Treasurers Institute Nov 13-17 and hotel information

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1. EVALUATION FORMS

I am looking for a new employee performance evaluation form. If available please email a copy of your evaluation forms to my attention and cc a copy to Mike Peterson.

Thanks,
Jeanne Schacht
jschacht@mchsi.com

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2. ARE INSURANCE BENEFITS FOR DISABLED OFFICERS FREE?

We have a disabled police officer who is receiving a duty related disability pension check. He also qualifies for the health coverage "free" from the city based on the Public Safety Employee Benefits Act.

Because his disability is duty related, it is tax-free. The City is taking the stance that the insurance benefits have a value to him and he should be given a W-2 for the value of the health care premiums he isn't paying. They want to issue a W-2 for taxable income for $14,962.68.

My thoughts are that if the pension is tax-free, why wouldn't the insurance benefits be tax-free? Has anyone encountered this situation? Does anyone know if there is an IRS ruling on this?

Any information would be greatly appreciated!

Linda Buss
Freeport
lbuss@cityoffreeport.org

Linda, I contacted our IRS agent that has attended a few IMTA functions and her response is below.
Good Luck
Michael

Mike,
First and foremost, I cannot provide written advice on a specific set of facts and circumstances. I can provide "oral" guidance but not written advice. However, I will state this generically:

Section 106 of the Internal Revenue Code provides that the gross income of an employee does not include contributions which the employee's employer makes to an accident or health plan for compensation (through insurance or otherwise) for personal injuries or sickness to the employee or the employee's spouse or dependents.

I am not familiar with the Public Safety Employee Benefits Act. Therefore, the deciding factor would be what the Act actually stipulates that an employer must do. If the employer is required to provide the total health insurance "free" (by State law or statute), it appears that 100% of the amount is an EMPLOYER contribution (by obligation) under section 106 and thus not taxable to the employee. It is up to the entity to review the substance of the Act and come to an understanding of what its contractual and legal obligations are to the employee.

Again, this is merely an opinion based on a reading of Internal Revenue Code section 106 and the situation as represented to me. It cannot be cited as an official IRS ruling or policy. If the entity wants something in writing, it will need to secure a private letter ruling (for a fee) from our offices in Washington, D.C.

Joyce Reinsma
FSLG Field Specialist
Phone: (312) 566-3879

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3. TREASURERS INSTITUTE

The Treasurers Institute will be held November 13-17, 2005 at the Decatur Holiday Inn Select, Decatur Illinois. A block of rooms has been reserved at the hotel for the Treasurers Institute participants. To receive the special

rate of $70 plus tax for a single or double room, reservations must be made no later than October 13. You may make your reservations by calling the hotel directly: (217) 422-8800 and mention that you are with the Treasurers Institute.

If you have not received a copy of the Treasurers Institute brochure, please contact me at (217) 581-5116, or you may view a copy of the brochure at our website: http://www.eiu.edu/~adulted/noncredit/imti05.html

Jo Ellen Hickenbottom
IMTA Association Coordinator