Due to costs being charged to federal sponsored agreements, University Financial Services' Cost Accounting Services team submits an annual proposal of UVM's projected benefit rates for the upcoming fiscal year to the U.S. Department of Health & Human Services for review and approval. The approved rates are included in the annual rate agreement (PDF) between the federal government and the University.
Benefits offered by the University to its employees include health and dental insurance, retirement savings contributions, FICA/Medicare, employee insurance, sabbatical leave, workers’ compensation, tuition remission, and unemployment compensation.
Benefit Rates by Employee Type
Each University benefit rate is derived by Cost Accounting Services in accordance with the Office of Management and Budget's Uniform Guidance for federal awards and the University Cost Accounting Standards (DS-2) (PDF).
UVM applies the applicable composite benefit rate (PDF) to each employee’s payroll expense to allocate benefits costs to the various University budgets. This occurs during each payroll’s posting process to the General Ledger. Each payroll expense account in the PeopleSoft HR system has an associated benefit expense account, which determines the benefit rate applied.
| Benefit Rate | Expense Account Used | Benefit Cost Components |
|---|---|---|
| Full-time employees | 59910 | Health insurance, retirement, FICA/Medicare, employee insurance, sabbatical leave, workers’ compensation, faculty/staff tuition remission, unemployment compensation |
| Federal Civil Service employees | 59912 | |
| Temporary/Part-time employees | 59914 | FICA/Medicare, workers' compensation, and federally mandated (ACA) health coverage costs for eligible temporary employees |
| UVM Medical Group employees | 59916 | |
| Graduate student employees | 59918 | Health insurance, workers' compensation |
| Student employees | 59915 | FICA/Medicare, workers' compensation |
All costs included in the benefit rates must comply with the applicable federal regulations.
For sponsored agreement proposals, future-year projected benefit rates are derived and communicated to Sponsored Project Administration to use in applicable multi-year proposals.
Benefit Expense Components
As shown below, the largest components of benefit expenses are medical/dental health, retirement, and social security.
| Benefit | Percent |
|---|---|
| Medical/Dental Health | 54.8% |
| Retirement | 19.8% |
| Social Security | 16.0% |
| Sabbatical | 3.5% |
| Workers' Compensation | 1.6% |
| Employee Tuition Benefits | 1.7% |
| All Other | 3.2% |
Cost Accounting Principles for Benefit Rates
The cost accounting principles for determining and applying benefit rates are:
- The costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, non-Federal entity-employee agreement, or an established policy of the University.
- Benefit costs must be allowable, allocable, reasonable and treated consistently
- Benefit costs assigned to each benefit rate (numerator) are actual costs or are allocated based on salaries/wages (base) of employees receiving the benefits
- Benefit costs related to salaries or wages treated as direct costs on sponsored agreements must also be treated as direct costs
- Benefit costs related to salaries or wages treated as F&A costs must also be treated as F&A costs
- Unallowable costs such as tuition remission for spouse and dependents are not included in the benefit costs of the rates.
- Health insurance for postdoc fellows/trainees are not included in any of the benefit rates.
- Vacation, holiday, sick leave pay and other paid absences are included in salaries and wages (base)
These cost principles are based on the applicable Federal Governmental regulations (Uniform Guidance 200.431)