Imputed Income is the estimated value of Stanford's financial contribution towards health insurance coverage (medical, dental, vision, and accidental death and dismemberment) for registered domestic partners. It must be reported as taxable wages earned and as such, the value of their coverages are exempt from State taxes. However, because Federal tax rules do not recognize domestic partners, the cost of the coverage is not tax protected and an imputed income tax is calculated on the cost of the coverage for the non-employee.
The imputed income rates are calculated based on the unadjusted rates established for each medical plan for Stanford University. These unadjusted rates represent the best estimate by our actuaries for the plan costs, which are used as the basis for the fair market value of the health care coverage extended to the employee’s domestic partner and/or domestic partners’ children.
The rates shown on the Stanford website as the “total cost” represent the risk-adjusted rates and do not reflect the actual cost of the plan. When Stanford calculates the plan rates that we charge employees we follow our managed competition philosophy. This means we do a rate adjustment based on the health demographics of a plan when compared to others to spread the risk evenly across all plans (i.e. a plan with a sicker population would see the rates we charge reduced as compared to the "actual" cost and a plan with a healthier population would see the rates we charge go up as compared to "actual" cost). Our university subsidy is also based upon the cost of the lowest cost plan. However, for purposes of calculating imputed income we are required by the IRS to base it on the actual plan values which is why the two numbers will not be comparable to each other. To ultimately determine the imputed income amount you can look on your final paystub of the year under DOM-YTD. If you have any trouble finding this, Payroll may be able to assist.