COMPTROLLER'S SEAL STATE OF CONNECTICUT

STATE OF CONNECTICUT

NANCY WYMAN
COMPTROLLER
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MARK OJAKIAN
DEPUTY COMPTROLLER

MEMORANDUM NO. 2007- 25

October 31, 2007

TO THE HEADS OF ALL STATE AGENCIES

Attention: Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers
Subject: Military Leave - Benefits and Compensation

I. AUTHORITY

This memo replaces Memorandum 2005-32, dated October 4, 2005. State legislation provides for additional benefits and compensation for State employees called to active military service in the armed forces of any state or the United States for Operation Enduring Freedom, Operation Noble Eagle, a related emergency operation, or a military operation whose mission was substantially changed as a result of the attacks of September 11, 2001, federal action or state action authorized by the Governor in support of the federal Department of Homeland Security's Operation Liberty Shield, military operations that are authorized by the President of the United States that entail military action against Iraq, or federal action or state action authorized by the Governor to combat terrorism within the United States, or federal action or state action authorized by the Governor or the President of the United States that entails service or military action as part of Operation Jump Start at the border of the United States and Mexico, for the duration of such call-up to active service (PA 07-112). Covered State employees of the Executive, Legislative or Judicial Department are as follows:

1. elected officials
2. officers
3. full-time employees (non-permanent and permanent)

The following additional benefits and compensation are to be provided to employees (as defined above), who are in support of a qualifying operation as stated above in Section I.

1. Health Insurance Benefits - For the duration of the time the State employee is on said military leave, they and their dependents may continue their existent State group health insurance including medical and/or dental coverage by continuing to pay the employee share of the premium due.
 
2. Full Pay - Leave of absence with pay for thirty calendar days beginning the date full-time employees are called to active service. Paid leave applies to a calendar year. If the call-up continues into the next calendar year the employee is eligible for another thirty calendar days of paid military leave starting January 1.
 
3. Part Pay - After the expiration of the thirty calendar day full pay (as provided above, by bargaining contract or pursuant to Section 27-33 of the Connecticut General Statutes) pay the difference between the employee's base rate of pay plus longevity, and the total compensation the employee receives for such active military service. The employee would be entitled to "part pay" for his/her primary State position only. Eligibility for "part pay" is contingent on the fact that the employee receives no other full pay from the State.
 
4. Vacation, Equivalent Leave and Sick Accruals - State employees who have been activated in the military will continue to accrue all vacation time, equivalent leave time and sick time to which the employee would be entitled if he or she had continued working in his or her state position during the time of such active service and will be credited with the accrued vacation time, equivalent leave time or sick time. If these accruals of leave time cause the employee to exceed any limit on leave time pursuant to the General Statutes, regulations of Connecticut State agencies or a collective bargaining agreement, then the accrual limits will be temporarily waived to allow the employee to use the excess leave time before the later of the following: (A) from the date of the state employee's discharge from active service until that state employee returns to state employment, (B) not later than one hundred twenty calendar days after the state employee returns to employment, or (C) not later than one hundred twenty calendar days after the employee is credited with such excess leave time (PA 07-112). (OSC Memoranda 2006-26 and 2007-31).
 
5. Additional Criteria - The state employee is not required to exhaust accrued vacation time, equivalent leave time or sick time to be eligible for the paid leave of absence and part pay. Equivalent leave time means leave time classified as other than vacation time or sick time and includes, but not limited to, leave time classified as recess rather than vacation time.

No state employee shall be deemed ineligible for any benefit under this section or under any other provision of this chapter solely because such employee's leave time is classified as recess or other equivalent leave time rather than vacation time pursuant to the provisions of a collective bargaining agreement, including a collective bargaining agreement covering a state employee in a teaching, instructional or professional position in the Unified School District 1, 2 or 3 (PA 07-112).

II. PART PAY CONDITIONS

A. Eligibility
The following conditions must be met for an employee to qualify for part pay:

1. The employee, as defined in Section I, must be full-time. The employee may have permanent or non-permanent status provided he/she is full-time.
 
2. The State employee must be on active duty in the armed forces of any state or of any reserve component of the United States for a qualifying operation as stated in Section I.

In order to qualify, an employee must have been called to active duty for participation in a qualifying operation. Employees taking military leave for training or other military activations not related to the subject conflict would not qualify for the additional benefits and compensation.

B. Certification

The Office of the Comptroller will certify to each employing agency the total military compensation to be used to calculate the difference between total military compensation and the employee's base rate of pay, plus longevity, in the employee's primary State position. This amount will represent the equivalent bi-weekly military compensation and will be sent to the payroll unit by the Comptroller's Fiscal Policy Division.

State agencies are directed to use only those amounts certified by the Comptroller to calculate part pay.

If any agency receives copies of military compensation data, Leave and Earnings Statements or certification of pay by the employee or their designated representative, please forward to:

Office of the State Comptroller
Fiscal Policy Division
55 Elm Street Room 219
Hartford, Connecticut 06106
Attn: Elizabeth Daly
Fax Number - (860) 702-3441

For the employee who is to be activated, the first line of contact should be their agency Personnel/Payroll Officer. The officer should refer the employee to Memorandum No. 2007-35 which provides the information requested by the Office of the State Comptroller. When this information is received, the Office of the State Comptroller will initiate the part pay certification.

It is imperative that after the part pay is initiated and if the activated employee receives an increase in his/her military pay; they should notify their payroll officer by sending the latest Leave Earnings Statement. The agency payroll officer should notify the Fiscal Policy Division with a copy of the latest Leave Earnings Statement and a revised part pay letter will be issued to the agency. Failure to comply with this process may result in an overpayment to the employee.

C. Reconciliation

It will be necessary to reconcile the part pay upon the employee's return to State service. Copies of all Leave Earnings Statement must be maintained and submitted to the employing agency upon the employee's return to State service in order to reconcile the amount of part pay with the amount due the employee.

Take the following steps to perform this reconciliation:

1. Obtain copies of the employees' Leave and Earnings Statements covering the period that they were in active military duty status.
 
2. Calculate total gross military compensation. Gross military compensation would include, (but is not limited to) base military pay and special pay which includes enlistment and re-enlistment bonuses. Other items not included on gross military compensation are (BAH) housing, (BAS) subsistence, (OHA) overseas housing allowance and travel allowances.
 
Please Note: Combat Zone Exclusions: Enlistment and re-enlistment bonus payments and imminent danger/hostile fire pay that occurs at the time when service is in a combat zone are excluded from gross military compensation.
 
3. Determine the gross military compensation paid for the first thirty calendar days of each year of active military duty. Subtract this amount from the gross military compensation.
 
4. Subtract compensation received as a reimbursement of expenses. The remainder will be considered the adjusted gross military compensation.
 
5. Calculate the total amount of "part pay" paid to the employee.
 
This can be arrived at by determining the number of pay periods in which the part pay was paid and multiplying that number times the amount of part pay.
 
6. Determine the amount of what the State pay would have been for the same period, less the compensation received for the first thirty calendar days of each year of active military duty.
 
7. Add the amounts of step 4 and step 5, subtract the amount from step 6.
 
8. If the amount calculated in step 7 is less than the adjusted gross military compensation (step 4), the employee has been underpaid. The difference is to be paid to the employee as a lump sum payment.
 
9. If the amount calculated in step 7 is greater than the adjusted gross military compensation (step 4), the employee has been over paid. The difference is to be repaid by the employee. Take the necessary steps, as outlined in the employee's collective bargaining contract or as prescribed by State policy, to obtain repayment from the employee.

III. PAYROLL DEDUCTIONS

A. The following mandatory deductions must be made from the employee's "part pay":

1. Federal withholding tax, social security, and state withholding tax as applicable.
 
2. Retirement Contributions - Retirement contributions on any "part pay" should be deducted as required by the employee's Tier and Plan membership.
 
3. Garnishments - The amount to be deducted should be taken at a reduced rate based on the calculation formula stated on the execution notice.
 
4. Health Insurance - The employee's share of the premium payment for coverage elected.*
 
5. Life Insurance - If elected, to be deducted at the same rate as being paid at the time the employee left State Service.*
 
* If an employee's "part pay" is insufficient to pay the full amount of these deductions, the Health and Life Insurance premiums must be paid directly to the employing agency's payroll office. Failure to make such premium payment will result in discontinuation of benefits. The same procedures used for employees on an approved leave of absence should be used to pay the employer's premium.

B. All other voluntary deductions may be taken from an employee's "part pay" if sufficient monies remain to pay these deductions.

C. Dues and Fees
The following employee bargaining units have employees who are on military leave for a qualifying operation as stated in Section I, and have waived the deduction of dues and fees from the "part pay".

NP-1 State Police
NP-2 CEUI
NP-3 AFSCME, Council 4, Locals 196, 318, 355, 478, 538, 562, 610 & 704
NP-4 AFSCME, Council 4, Locals 387, 391 & 1565
NP-5 Protective Services
NP-6/P-1 Health Care Professionals
NP-8 Correctional Supervisors
P-2 AFSMCE, Council 4, Locals 269, 714, & 2663
P-3A CSEA
P-3B CSEA
P-4 CSEA
Criminal Justice Inspectors
Vo-Tech Faculty

If you have employees eligible for "part pay" in bargaining units not listed, please contact the Comptroller's Office, Fiscal Policy Division, at the telephone number listed in Section VII of this memorandum to determine if dues or fees should be withheld from the employee's "part pay".

IV. RETROACTIVE PAYMENTS AND DEDUCTIONS

The following lump sum payments are subject to mandatory deductions only; i.e., withholding tax, social security tax, retirement contributions, and garnishments.

1. "Part Pay" - Paid after expiration of the thirty-day paid military leave for the duration of the call up covered by Public Act 07-112
 
2. "Full Pay" - Permanent and Non-permanent employees are eligible under subject act for thirty (30) days "full pay" for military leave.

In addition, retroactive deductions for health and life insurance must be made. The agency payroll staff must calculate the retroactive amounts due (employer and employee shares) and send override amounts to Central Benefits for review. See Comptroller's Memorandum 2004-10 for further information regarding retroactive benefit procedures.

V. PROCEDURES FOR EMPLOYEE BENEFITS

A. Health Insurance Including Medical and Dental Coverage

Comptroller's Memorandum 2007-35 advises agencies with active military personnel to contact the Comptroller's Office. Upon receipt of such notification, the Comptroller's Office will mail a letter to affected employees and/or their families regarding Public Act 07-112. This letter advises that the employees personnel or payroll office should be contacted to arrange continued health and life insurance coverage and if the employee wishes deductions to continue for supplemental benefits. This letter also advises that the employee may be entitled to reimbursement of any COBRA premium they may have paid for continuation of health insurance benefits.

NOTE: If an employee does not arrange to continue health insurance coverage, such coverage must be terminated in accordance with standard procedures. A COBRA notice must be issued to the employee and to any covered dependents whose coverage is terminated using the CoreCT benefits administration system. These procedures must be followed even if the health insurance programs available through the military cover the employee and/or their dependents.

The following actions should be taken to continue or to reinstate health insurance benefits:

1. Health insurance premiums will continue to be paid to the health insurance carrier as long as the employee is actively enrolled through the CoreCT benefits administration module.
 
2. No benefits changes are necessary to process health insurance if the employee will be on partial pay after any paid military leave and if the partial pay amount is adequate to cover the employee's share of the premium.
 
3. If the employee will not be in partial pay status at the time regular payroll health insurance deductions end, the agency must bill the employee for the employee's share of the premium using the CoreCT benefits billing process. The employee or family member must send payment to the agency office that is responsible for health insurance coverage. See Comptroller's Memorandum 2004-03A and 2007-08 for further information regarding payment of benefits while on leave.
 
4. If the employee and/or their dependents continued health insurance through COBRA prior to the implementation of these procedures, their coverage should be reinstated retroactively to the date of termination from the group coverage. The agency payroll staff must calculate the retroactive amounts due (employer and employee shares) and send override amounts to Central Benefits for review. See the Core-CT Retroactive Job Aids located at http://www.core-ct.state.us/user/hrjobaids/ben/default.htm for further information regarding retroactive benefit procedures. After the first retroactive deduction is processed, the Agency should send a letter to the Anthem COBRA Unit stating that coverage has been reinstated retroactively, and to what date, and that the carrier should process a refund directly to the participant. A copy of the letter should be provided to the employee.

B. Group Life Insurance

In accordance with the provisions of the State of Connecticut Group Life Insurance Policy, employees on military leave without pay are granted the opportunity to maintain coverage for a period of one year, provided they continue to remit premiums during the leave. Premium payments must be made and processed in accordance with the procedures in Comptroller's Memorandum 2004-03A and 2007-08.

If the military leave lasts less than one year and all required premium payments are made during such leave, an employee must resume payroll deductions immediately upon return to work in order to maintain continuity of coverage. Failure to do so will require evidence of insurability approved by the contracted insurance company if the employee wishes to rejoin at a later date.

If the military leave continues beyond one year, coverage must be terminated in the CoreCT system by the employing agency by processing a TEL (Terminate due to Extended LOA) event in Benefits Administration effective on the first anniversary of the date that the leave began.

Coverage may be reinstated without evidence of insurability upon the employee's return to work, to the extent that:

1. All required premium payments were made during the military leave; and
 
2. They meet all eligibility requirements of a new employee prior to the reinstatement of coverage. The agency must contact the Employee Benefits Unit for reinstatement approval upon the employee's return from the leave.

For additional information, refer to the Group Life Insurance Summary Plan Description under the heading "Leave of Absence".

The State of Connecticut Group Life Insurance Policy does not contain an exclusion for death due to acts of war.

C. Retirement

Documentation related to "part pay" episodes must be provided to the Retirement & Benefit Services Division to ensure that such information is retained on the impacted employee's retirement record. This includes any calculation worksheets utilized to determine the "part pay" due such employee or any retroactive payments linked to this circumstance.

Any appropriate contributions for the member's specific system and plan membership should be deducted from the member's part pay. Then, if eligible, the employee may apply, upon return from military leave, to purchase full retirement credit for his/her qualifying military service provided he/she returns within ninety (90) days of honorable discharge. The cost will be based on the individual employee's plan requirements.

D. State of Connecticut 403(b) Program and Deferred Compensation (457)

In 2007, the maximum annual contribution limit for the State of Connecticut 403(b) Program and Deferred Compensation (457) Plan is the lesser of $15,500 or 100% of gross salary. Refer to Comptroller's Memoranda 2006-37 for further information concerning contribution limits.

In either case, gross salary should be calculated using the "part pay" amount only. The amount of military pay the employee is receiving may not be included.

The provisions of the 403(b) Program and Deferred Compensation (457) Plan provide that employees that return to work subsequent to service in the uniformed services of the United States may make up contribution amounts they otherwise would have made had they remained continuously employed by the State of Connecticut. Employees should contact the Plans' Third Party Administrator, ING, at 800-584-6001 for further information.

E. Earned Time Accrual

The employee may choose to exhaust his/her earned time (exclusive of accrued sick leave) prior to going on leave without pay status. However, the employee is not eligible to be paid for earned time and the "part pay" for the same period.

Upon return to State service, the employee may have his/her vacation time restored by repaying the Salaries and Wages paid for earned time used. The amount of repayment would be calculated by deducting out the "part pay" entitlement.

VI. PAYROLL PROCEDURES

Entering the "Part Pay", Retroactive "Part Pay" Amounts and Retroactive 30-Day Military Leave Entitlements for Permanent Non-permanent Employees on the Bi-Weekly Payroll:

Full Pay and any Retroactive Payments:
Time Sheet Page: Hours; Time Reporting Code LMILA
On the Additional Pay Page: Hours or Amount; Earnings Code PDL

Part Pay and any Retroactive Payments:
Time sheet page: Amount; Time Reporting Code XMCUA OR
Hours; Time Reporting Code XMCUH
On the Additional Pay Page: Hours or Amount; Earnings Code MCU

VII. QUESTIONS

Questions may be directed to the State Comptroller's Office as follows:

Payroll Procedures:

Payroll Services Division, (860) 702-3463 or (860) 702-3451;

Memorandum Interpretation and Dues & Fees Waiver:

Fiscal Policy Division, (860) 702-3440

Health Insurance:

Retirement and Benefits Services Division,
Central Benefits Unit, (860) 702-3535

Group Life Insurance:

Retirement and Benefits Services Division,
Group Life Insurance Unit, (860) 702-3537

403(b) and 457 Plans:

Retirement and Benefits Services Division
Employee Benefits Unit, (860) 702-3543

Retirement Issues:

Retirement and Benefits Services Division,
Retirement Credit Purchases Unit, (860) 702-3511

Contractual Issues: Agency Personnel Officer

NANCY WYMAN
STATE COMPTROLLER

NW:EH

Return to Index of 2007 Comptroller's Memoranda
Return to Index of Comptroller's Memoranda
Return to Comptroller's Home Page