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of salary.4 In the case of life insurance, the options involve
coverage based on different multiples of salary, which range from
1 times salary to 4 times salary.
According to the Met Life manual, if the cost of the
selected benefits is less than the Met Life contribution, then
the excess of the Met Life contribution over the cost of the
selected benefits is distributed to the employee as cash in his
or her wages. On the other hand, if the cost of the selected
benefits is greater than the Met Life contribution, then the
excess of the cost of the selected benefits over the amount of
the Met Life contribution is deducted from the employee's wages
on a pre-tax basis.
On November 10, 1988, petitioner completed an enrollment
form for participation in Met Life's flexible benefits plan for
1989. On that form, petitioner selected the following "before-
tax" benefits: (1) Medical benefits for himself and his
dependents; (2) dental benefits for himself and his dependents;
(3) long-term disability benefits at 60 percent of salary; and
(4) life insurance benefits at 4 times salary. The cost for each
of these benefits was $4,448, $495, $502, and $288, respectively,
for a total cost of $5,733. The applicable Met Life contribution
applied against the total cost was $4,811. The difference
4 The amount of disability benefits is also related to the
number of years of service that an employee accrues prior to the
date of his or her disability.
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Last modified: May 25, 2011