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Terms Regarding Benefits

60-Day Rule:
Guideline set forth by the IRS (Internal Revenue Service), stating that all healthcare elections must be made within 60 calendar days of a qualifying event.
401a:
see State Universities Retirement System
457:
see Deferred Compensation.
403b:
Tax Deferred Annuity similar to a 401k, available to certain employer groups such as an educational organization which allows participants to invest a certain amount of pre-tax dollars into a supplemental retirement account. See the list of approved vendors available to your employer.
Beneficiary:
Person whom the employee names as the owner of their account in the event of their death.
Benefits Choice Period:
Annual period in which participants may make changes to health care coverage without the necessity of a qualifying event.
Certification of Credible Coverage:
A written certificate issued by a group health plan or health insurer that shows prior health coverage (credible coverage) and is used to satisfy waiting periods for plans which specify pre-existing conditions.
COBRA:
Consolidated Omnibus Budget Reconciliation Act of 1985 - Statute that requires employers to offer the option of purchasing continued benefit coverage to qualified employees/beneficiaries who would otherwise lose group health insurance as a result of a qualifying event.
Conversion & Portability:
Provision that allows terminated employees to change existing life insurance policies to a private plan (convertibility) or continue coverage at the same or reduced benefit amount until a stipulated age, depending on coverage (portability).
Coordination of Benefits (COB):
Provisions to avoid duplicate payments from multiple insurance policies.
Co-Insurance:
Co-insurance describes the participation between an insurance carrier and the insured to pay medical expenses once the insured person reaches his/her annual deductible. For example a State of Illinois health insurance provider may pay 90% of a medical bill and the insured will pay the remaining 10%.
Co-Pay:
The fixed amount the insured pays at the time service is rendered for covered expenses. Payment goes directly to the health care provider and is not applied to deductible or out-of-pocket maximums.
Deductible:
The annual amount that has been charged to the insured before services are eligible for co-insurance payments.
Deferred Compensation:
Administered by the State of Illinois, allows employees to invest pre-tax dollars into a supplemental retirement account.
Domestic Partner:
Any person who meets all qualifications for registration by the University as a covered spouse without certificate of legal marriage.
EAP:
Employee Assistance Program: Program offering support services to address a variety of concerns such as legal support, counseling, eldercare/dependent services, stress management etc.
Evidence of Insurability:
A procedure used, most usually in the case of life insurance, that takes into account an applicant's physical condition and medical history for evaluation by an insurance provider when determining risk of coverage.
Exclusion:

Specific services or conditions that are not covered under insurance guidelines.

Explanation of Benefits (EOB):
Statement sent to insured from insurance provider that lists services rendered, amount billed and amount paid. Statement is not a bill but a document used for record keeping purposes.
Flexible Spending Account (FSA):
Special accounts offered to employees to deduct pre-tax dollars from their current pay for the reimbursement of medical expenses and/or dependent care expenses. Account maximum is established and cannot be rolled over from one year to the next.
Formulary:
The detailed list of coverage for drugs listed under a prescription plan.
Group Term Life Insurance:
Life insurance available to active employees through their employer. Coverage is for a specific period of time as specified by the insurance policy and has no cash value.
HIPPA:
Health Insurance Privacy and Portability Act - A set of federal guidelines that protects coverage levels for employees and also sets forth regulations about how employees' private information is handled and protected.
In-Network:
Refers to services acquired through a physician or health care provider who has an existing contract for services and payment with the insurance provider.
Lifetime Maximum:
Refers to the maximum dollar amount of insurance coverage allowed per insured person during their lifetime for services rendered under an insurance contract.
Managed Care:
A method of delivering comprehensive medical benefits at lower out-of-pocket cost. Managed care health plans coordinate all aspects of health care including medical, prescription drugs, and behavioral health services.
Medical Necessity:
Definitions vary by insurance plan but typically refers to treatment that is required and is not optional.
Out-of-Pocket Maximum:
The dollar amount the insured is to pay per fiscal year. Once the Out-of-Pocket Maximum has been reached, Co-Insurance becomes 100%.
Out-of-Network:
Refers to services acquired through a physician or health care provider who does not have an existing contract for services and payment with an insurance provider. The insured is usually responsible for more of the cost for services rendered than when receiving care from an in-network physician or health care provider.
Portability:
See Conversion & Portability
PPO (Preferred Provider Organization):
Type of plan that offers coverage for in-network providers. The insured is usually responsible for less of the cost for services rendered than when receiving care from an out-of-network provider.
Pre-Authorization:
Process that requires the insured person or the health care provider to notify the insurance provider, in advance, of the course of care to be provided. Also known as Prior Authorization.
Primary Care Physician (PCP):
Serves as the general physician under the managed care plans.
Primary Coverage:
Refers to insurance plan that will determine initial eligibility and payment of claims. After which secondary coverage, if applicable, will process and determine further payment, if eligible.
Premium:
Amount of money employee pays semi-monthly for insurance coverage. Usually deducted pre-tax from each pay check twice a month.
Preventive Care:
Refers to approved services rendered to prevent illness but does not include diagnostic treatment. Examples would include, check-ups, physicals, Wellness Checks, Dental Cleanings and Exams etc.
Prior Authorization:
See Pre-Authorization.
Qualifying Event:
A life changing event, such as birth, death, marriage, divorce, loss of coverage, change in job status, etc. upon which an employee who is eligible for benefits has 60 days from the date of the event to make any necessary changes to their health care coverage. This is the only time persons may make changes to health care coverage outside of annual Benefits Choice Period.
Reasonable & Customary:
The amount insurance providers use to define the amount they will cover for a particular procedure, most usually the amount paid on out-of-network services. This amount is determined using historical data collected by the claims administrator for the providers' charges within specific geographic areas and independent claims research.
Secondary Coverage:
Supplemental coverage to primary coverage. After claims are processed and/or paid by the primary coverage insurance provider, claims may be submitted to the secondary insurance provider to determine payment eligibility.
Specialist:
Refers to an eligible physician or health care provider who offers specific services rather than general, such as allergists, chiropractors, etc .
State Universities Retirement System (401a):

The retirement system for State of Illinois University employees which deducts 8% of gross salary tax deferred (in lieu of Social Security).

TDA (Tax Deferred Annuity):
Refers to investment plans such as 403b or 457 that house optional pre-tax retirement contributions.
Vesting:
Refers to an individual's eligibility and access to full retirement account rights and amounts.

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Terms Regarding Civil Service Employment

Allocation:
Assignment of a position to a class.
Applicant:
A person requesting permission to take an examination.
Candidate:
A person on a register, as qualified by examination, seniority, or service.
Certified:
Referred from a register, in accordance with the Civil Service Statute, as a candidate for consideration for employment.
Certify:
To refer from a register, in accordance with the Civil Service Statute, the name of a candidate who shall be considered for employment.
Class:
A group of positions which are so similar in duties, responsibilities, and job worth, and require such similar education and experience, that each position in the group has been given the same job title and is filled by the same tests of ability.
Classification:
Assignment of a position to a class.
Demotion:
A demotion may occur when a status employee:
  1. is subject to a reduction in salary in his/her current position, or in a position of the same class to which he/she has been reassigned, except when the reduction in pay results from an overall reduction in pay to persons employed in the same class and/or when the Merit Board, on the basis of supporting evidence, determines that the pay potential should be lowered for a class;
  2. is subject to a reduction in percentage of time worked;
  3. is appointed to a position in a lower class in a promotional line;
  4. is appointed to a position in a class outside a promotional line with a lower pay potential;
  5. is given a non-status appointment.

(Note for clarification: If a status employee, on his/her own initiative, requests a reassignment or a transfer to another position in his/her class or applies for, and takes, an examination and thereafter permits his/her name to be certified to a position in a class other than the one in which he/she is currently employed, and, in either case, accepts an appointment which results in a reduction in pay or pay potential, such a reduction shall not be considered a demotion.)

Employee:
A person legally employed to perform the work of a position.
Lesser Unit:
A seniority unit within a class, within an institution or agency as specified in the Civil Service Statute, as determined by the Merit Board, provided two-thirds of the status employees within the class have agreed to the creation of such lesser unit.
Non-status Appointment:
Appointment of a certified candidate to a position which has been classified and approved by the Director as other than a status appointment as herein defined.
Place of Employment:
An institution or agency defined in the Civil Service Statute, or a unit thereof, as determined by the Merit Board, the designation of which has been for the purposes of maintenance of registers, of computation of seniority, of establishment of pay rates or ranges, and of effecting transfers by an employer.
Position:
A group of duties and responsibilities, assigned or delegated by competent authority, requiring the full-time service of one person, or the part-time service of one or more persons.
Reallocation:
Reassignment of an existing position to a class which is a part of a different promotional line, or to a class which is not a part of any promotional line.
Reassignment:
Moving of an employee by an employer from one position to another in the same class within a place of employment, subject to limitations imposed by lesser units.
Reclassification:
Reassignment of an existing position within a promotional line.
Register:
A list of one or more names of candidates, listed in accordance with the Statute and this Part.
Resignation:
An act by which an employee voluntarily separates himself/herself from his/her employment.
Rewrite Examination:
An examination for a class which is taken by an applicant subsequent to failing a previous examination for the same class, or which is taken by an applicant subsequent to passing a previous examination for the same class in an attempt to improve his examination score.
Seniority:
After completion of the probationary period, a term used to describe time worked in a class or in classes within the same promotional line, computed in accordance with the provisions of the Statute and this Part.
Service:
The term used to describe time worked in a class under a status appointment by an employee who is serving, but who has not completed, a probationary period in that class.
Status Appointment:
Appointment of a certified candidate to a position which has been classified and approved by the Director as a continuing position under the position control record plan of the System.
Status Employee:
An employee who has successfully completed a probationary period in a class.
Status Position:
A position which has been classified and approved by the Director under the position control record system.
Termination:
Discontinuance of services of an employee having a non-status appointment; discontinuance of services of an employee in one place of employment, who has transferred within the System to another place of employment; failure of a provisional employee to meet certification requirements; and/or death, retirement, or inability of a an employee to return from a leave of absence in accordance with Section 250.110(b)(5).
Transfer:
Moving of an employee from one position to another in the same class between constituent places of employment.

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Terms Regarding Foreign Nationals (NRAs)

Academic Year: An academic year is considered August 15 - May 15 (approximately). The year follows the school calendar. This is typically the dates of employment for 9-month employees.
Acceptance Agent: An individual authorized by the IRS to assist foreign individuals obtain Individual Tax Identification Number (ITIN).
Country of Tax Residence: The country in which an individual was previously living and working before they came to the US. This may be different from their country of citizenship.
Fellowship: An amount paid to a student or allowed for the benefit of a student for the purpose of providing financial aid while pursuing their studies.

Foreign National:

A term used to describe a person who is not a citizen of the host country in which he or she is temporally residing. An individual who is a citizen of any country other than the US. Whether a foreign national is a nonresident or resident alien for tax purposes is determined based on the individual's visa status, purpose of the current visit, length of stay in the US.
Form 1042-S: An IRS tax form that reports payment summary information for:
  • Foreign students with taxable scholarships
  • Tax treaty exemption holders
  • Prize/award winners
  • Foreign independent contractors
SIUE will provide this form to the necessary individuals by March 15th of each year. This form is used to complete a US tax return.

If you are eligible to use a tax treaty, but did not request or sign the necessary forms during the tax year to utilize a tax treaty, your income will be taxed and reported on a Form W-2. Not all nonresident aliens and foreign nationals will receive a 1042-S.
Form 8233: A federal tax form used to request US tax treaties for compensation/wages/salary. Must be completed by the employee, student worker, or graduate assistant, if they want to use a treaty.
Form I-94: A federal tax form that displays your arrival/departure in the US and is typically stapled into your passport across from your Visa. The date displayed on this card is the date in which a person's permission to remain in the US expires.
Form W2: A federal tax form issued by the employer to the employee that reports taxable gross wages and taxes withheld for a calendar year. This form is provided by January 31st each year and is used to complete a US tax return.
Form W4: A federal tax form that is known as the Employee Withholding Allowance Certificate. This form is prepared by the employee and used by the employer to establish the amount of federal withholding the employer should withhold from the employee's pay. Nonresident individuals for tax purposes, are restricted to the amount of withholdings.
Form W7: A federal tax form used to apply for an Individual Tax Identification Number. Must be prepared by the individual requesting the ITIN.
Form W-8Ben: A federal tax form used to honor US tax treaties for scholarships. Must be completed by the employee, student worker, or graduate assistant, if they want to use a treaty.
Green Card:

An alien registration card issued by the U.S. Citizenship and Immigration Services to a former nonresident alien. The card displays the official immigration status, or Lawful Permanent Residency in the United States of a foreign individual. Also known as: Resident Alien Card, Permanent Resident Card, Alien Registration Receipt Card.
Individual Tax Identification Number: A number assigned to an individual that is used to report income not associated with employment. Also referred to as an ITIN.
Internal Revenue Service (IRS): The IRS is the U.S. Government agency that establishes tax rates and tax tables and collects taxes. The IRS issues various forms named in this glossary such as the W-4, 1042-S, and W-2 which are used to assist individuals pay the taxes that apply to them.
Non-qualified Scholarship/fellowship payments: These are taxable payments made on behalf of an individual to pay for the costs of room and board, travel or other living costs. These payments will be reported to the IRS and the individual on Form 1042-S.
Original Date of Entry: This is the date in which the individual first arrived in the U.S. to carry out the purpose of their visa. This does not mean "last date of entry" and does not include vacations, holidays, etc.
Qualified Scholarship/fellowship payments: These are payments made on behalf of an individual to pay educational expenses such as tuition, required fees, books, and/or course required equipment and supplies. Only qualified scholarship payments made to nonresident aliens are exempt from withholding and are not required to be reported to the IRS.
Scholarship: An amount paid to or on behalf of an individual, providing financial aid in the pursuit of study or research. Scholarships may be both taxable and nontaxable.
Social Security Number: A unique 9-digit number assigned by the US Social Security Administration to an individual for purposes of reporting taxable income and taxes withheld.
Substantial Presence Test: A test used to determine a foreign individual's U.S. tax residency status. It involves a calculation of days present in the US over a period of 3 calendar years.
Taxable Income: Any income reported as taxable to an individual, this includes funds directly paid to an employee, student, or independent contractor, funds paid on behalf of that individual, or non-cash earnings such as a taxable tuition waiver.
Tax Treaty: This is an agreement between the U.S. and a foreign country that allows certain exemptions of federal tax to reduce or eliminate double taxation for foreign individuals. Currently, over 50 such tax treaties exist.
Visa Status: Visa status refers to the immigration status in which the foreign individual is in the U.S.
Withholding: These are federal income taxes an employer is required to deduct from a foreign individual's earnings. The employer must deposit these funds with the IRS on a timely manner. These are payroll deductions reducing a paycheck or may be a reduction to a stipend check.

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Terms Regarding Payroll

Advance Earned Income Credit:
Earned income credit that is partially paid in advance by the employer. This is done through a reduction in income tax withholding during each pay period.
Automated Clearing House (ACH):
A highly reliable and efficient electronic funds transfer system for processing electronic deposits between financial institutions.
ACH Reject:
An electronic transaction that cannot process smoothly through the Automated Clearing House system (ACH), such as an unsuccessful information or monetary exchange between the State of Illinois and the recipient's financial institution. The transaction could be rejected for a variety of reasons, including closed account, invalid routing number, invalid account number or improper format.
Calendar Year:
Refers to the period of time from January 1 through December 31.
Deductions:
An amount subtracted from an employee's paycheck. Deductions are pre-tax or post-tax, depending on the type of deduction.
Direct Deposit:
The electronic transfer of an employee's net pay directly to an account at a financial institution designated by the employee.
Disposable Earnings:
The amount of an employee's earnings remaining after deductions required by law used to determine the amount of an employee's pay that is subject to a garnishment, or child support withholding order.
Earned Income Credit:
A tax credit available to low-income employees which may be applied when the employee files his/her individual tax return.
Exempt Employee:
Employees who are not subject to the Fair Labor Standards Act (FLSA). These employees do not track, earn or receive overtime compensation.
Exemption:
Withholding allowance or deduction from Federal and/or State income tax. The number of allowable exemptions may be included on the W-4 cards for the employee, the employee's spouse, and dependents.
Fiscal Year:
Refers to the period from July 1 through June 30.
Garnishment:
A garnishment is a court action initiated by a creditor in an effort to obtain a part of an employee's earnings before the earnings are released to the employee.
Gross Pay:
Wages, before necessary taxes and voluntary deductions have been withheld.
Minimum Wage:
Lowest amount that an employer can pay its employees per hour under Federal or State law.
Net Pay:
Also known as Take Home Pay; it is income after necessary deductions and taxes have been withheld.
Taxable Income:
Income remaining after all pre-tax deductions and adjustments are considered.
Tips:
A gratuity amount paid in addition to a service, such as reported by Dining Services and Catering staff. Tip amounts and reporting are centralized in the Business Office of the Morris University Center.
Overload:
Additional assignment and compensation for an employee already at 100% FTE
Voluntary Deductions:
Deductions chosen by the employee in addition to the mandatory tax withholdings.
Withholding Allowance:
An allowance an employee claims on their Form W-4 for their employer to use in calculating the amount of income tax to withhold from the employee's paycheck. The more allowances claimed, the less income tax will be withheld. Usually, one allowance is claimed for the employee, their spouse, and each dependent.
W-2 Form:
The Wage and Tax Statement used to report wages, tips, other compensation, withheld income and social security taxes, and advance earned income credit payments to the IRS, Social Security Administration, and the employee.
W-4 Form:
The form an employee files with their employer to calculate the amount of tax to withhold from the employee's pay. Employees can file a new Form W-4 anytime their tax situation changes and they choose to have more or less tax withheld.
YTD- Year to Date:
The period of time beginning at the start of the calendar year to the current date.

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