December 22, 2015

Dear student: 

Seasons Greetings from Drexel’s Graduate College.

I am writing to you to explain an item that may appear on your e-bill and/or your pay stub for the month of December.

You may notice a credit and a debit for the amount of the health insurance subsidy, approximately $2,000. If you are a doctoral student and receive the health insurance subsidy from the Drexel Graduate College, under the Affordable Care Act this subsidy is a taxable benefit. The good news is that Drexel University is paying this tax on your behalf. Even better, there is nothing that you need to do, but we wanted to explain these changes to you in case they create any confusion.

In order for Drexel to properly pay and report the tax, your student account will show a reversal of the Health Insurance subsidy (a credit to you), and the monthly pay for December will include a payroll deduction. These will exactly offset. These amounts will include an amount to cover the Federal taxes that apply to the health insurance subsidy. Similarly, your W-2 form will reflect the net zero from the increase in wages and the applicable withholding taxes.

The end result is your net pay is unchanged, and, again you do not need to do anything. We’ve taken care of this tax for you. If you have any questions about this modification, please email us at graduatecollege@drexel.edu.

Wishing you all the best and a relaxing Winter Break!!

Sincerely,

James D. Herbert, PhD
Dean, Graduate College
Executive Vice Provost