COMPTROLLER'S SEAL STATE OF CONNECTICUT 55 ELM STREET
HARTFORD, CONNECTICUT
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Telephone: (860) 702-3480
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HEALTH CARE COST
CONTAINMENT COMMITTEE
STATE OF CONNECTICUT
OFFICE OF THE STATE COMPTROLLER
HEALTHCARE POLICY & BENEFIT SERVICES DIVISION

DIVISION MEMORANDUM 2011-05
TO THE HEADS OF ALL STATE AGENCIES

November 14, 2011

ATTENTION: Personnel and Payroll Officers
SUBJECT: Employees Currently Making Retiree Health Fund Contributions

The SEBAC 2011 Agreement requires all employees to contribute to the Retiree Health Fund for 10 years or until they retire, whichever comes first. Contributions for employees who are not currently contributing to the Fund will begin July 1, 2013. The purpose of this memorandum is to provide updated procedures affecting the 14,000+ employees who are currently contributing to the Retiree Health Fund.

New and Rehired Employees

All employees hired on or after July 1, 2011 (including rehires) should be set up for the OPEB deduction immediately. The deduction end date should be 10 years after the start date. No credit will be given for prior periods of State service.

New Deduction Code for TRS Members

There is a new Retiree Health Fund deduction code (OTRS) for State employee members of the Teachers Retirement System (TRS). SEBAC 2011 provides that State employee members of TRS contributing to the Retiree Health Fund should receive credit for amounts they pay to the TRS for retiree health care (currently 1.25% of compensation). The OTRS deduction was implemented for affected TRS members with the check dated October 7, 2011. All new State employee members of TRS should be signed up for the OTRS deduction only.

Exemption Categories

As under SEBAC 2009 Agreement, certain employees are not required to contribute to the Retiree Health Fund. Exempt categories include adjunct faculty members, employees who are not eligible for State-paid healthcare benefits, employees in temporary or durational positions, employees who are not eligible for retirement plan participation (for example, people working on J-1 or F-1 visas), and employees who have other retiree coverage in their own right.

Extension of End Dates for Employees Currently Contributing

Under SEBAC 2009 new hires and current employees with less than 5 years service as of July 1, 2010 were required to contribute to the Retiree Health Fund until they completed 10 years of service or transitioned directly to retirement, whichever came earlier. Under SEBAC 2011, all employees must contribute for a period of 10 years, unless the employee earlier retires.

As a result of this change, agencies will need to revise the end date for Retiree Health Fund contribution for all employees who are currently contributing so that deductions will stop 10 years from the start date. The Comptroller's Office has identified all individuals who are currently paying the Retiree Health Deduction and will send each agency's HR or Payroll office an auto-query that shows each affected employee's deduction start date and provides an adjusted end date for Retiree Health Fund contributions. Please begin making these changes for your employees.

Refund Requests

The SEBAC 2009 Agreement provided for a refund of Retiree Health Contributions by an employee who separates from State service before qualifying for retiree health coverage. Lately, the Healthcare Policy & Benefit Services Division has received a large number of refund requests from employees who have terminated from one position but are immediately rehired by another State agency or who resign from one- job but keep an existing part-time position.

A separation from service means a complete termination of the employment relationship. An employee who keeps one of two or more existing jobs with the State or who returns to the same job after a short break or based on some prior arrangement has not had a separation from service. A refund of Retiree Health Fund contributions will not be take place until there is a complete separation from service.

The Enrollment (CO-1300) and the Refund (CO-1301) Forms have been revised to be consistent with the requirements of the SEBAC 2011 Agreement and are now posted on the Comptroller's Web Site.

Deduction Tracking Page

CORE-CT is developing a tracking page to help agencies monitor each employee's status with regard to the Retiree Health Fund contributions. We will send out an announcement as soon as it is available.

Agency Payroll and Human Resources personnel with questions should e-mail Margaret.Haering@po.state.ct.us or telephone 860-702-3486.

Very truly yours,

THOMAS C. WOODRUFF, Ph.D.
Division Director

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