Cost of Coverage

SAIC and the participant share the cost of benefit coverage. SAIC pays a large percentage of the cost for most benefits. As part of the enrollment process, participants authorize SAIC to deduct their share of the cost (premiums) for applicable benefits from their pay. The amount of the contribution depends on the benefit election. Contribution rates are periodically reviewed and adjusted as necessary, generally at the beginning of the new year.

How Pre-tax Premium Contributions Affect Take-Home Pay

Premiums for certain SAIC benefits are deducted from a participant's pay before Social Security taxes and federal, state, and local (where applicable) income taxes are deducted. Paying premiums before taxes are taken out reduces the amount of gross salary. This lowers taxable income and, therefore, lowers the amount of payable income tax.

In exchange for lowering a participant's taxable income, the IRS restricts his or her ability to change coverage during the year unless the participant or dependent experiences a qualified status change or changes coverage during an Open Enrollment period.