Fair market value of domestic partner insurance

I recently added my DP to my employer health plan. Before adding, my tax-dependent children and I were covered at the ‘employee+children’ rate. By adding my DP, we moved to the ‘employee+family’ rate, which is 19% higher than the ‘e+c’ rate.

For tax purposes, my employer is calculating the fair market value of DP insurance as the incremental cost difference between ‘employee only’ and ‘employee+spouse’. That incremental difference equals 63% of the ‘e+c’ rate.

In my opinion, the FMV should be calculated as 19%, not 63%, of the ‘e+c’ rate. Because of my employer’s chosen approach, my tax hit is more than 3X larger than it needs to be.

I am a senior-level employee and the first of my kind to add a DP to an ‘e+c’ plan, so whatever I settle for will be the precedent for any future employees who may follow this path. So, I’ve been engaged in a debate with our HR admin over it, but I’m afraid I’m not making any progress. Can anyone suggest any strategies, documentation of tax guidance, or any other helpful information I can reference if I decide to escalate this matter to our C-suite?

submitted by /u/DDCoaster
[comments]