|55 ELM STREET
Telephone: (860) 702-3480
|HEALTH CARE COST
|STATE OF CONNECTICUT
OFFICE OF THE STATE COMPTROLLER
HEALTHCARE POLICY & BENEFIT SERVICES DIVISION
DIVISION MEMORANDUM 2013-02
TO THE HEADS OF ALL STATE AGENCIES
May 22, 2013
|ATTENTION:||Personnel and Payroll Officers|
|SUBJECT:||Retiree Health Fund Contributions Starting July 2013|
Under the SEBAC 2009 Agreement new employees and those with less than five years of service as of July 2010 began to contribute 3% of compensation to the Retiree Health Fund to offset the cost of future retiree health coverage. The SEBAC 2011 Agreement requires that all employees contribute to the Retiree Health Fund for 10 years or until they retire, whichever comes first. Deductions for employees not currently contributing to the fund will start in July 2013. This memorandum describes how the process will be implemented.
In April 2013, the Comptroller's office provided each agency with a list of employees eligible for the deduction. Agencies had until May 15, 2013 to notify the Comptroller's Office if anyone on the list should be excluded by reason of employment or other status. Retiree Health Fund contributions for approximately 37,000 additional employees (the "Affected Employees") will be initiated via CORE-CT. The deduction will take effect on each employee's first full pay period that begins after July 1, 2013. The deduction end dates (and future adjustment of deduction amounts) will also be performed through CORE-CT.
Agencies continue to be responsible for enrolling all new (or rehired) employees for the appropriate deduction, revising deduction end dates to reflect leaves of absence and preparing applications for refunds or exemption requests, where applicable.
Phase in of Contribution Amounts
The amount of the deduction for the Affected Employees will be phased in as follows: 0.5% from July 2013 to June 2014, 2% from July 2014 to 2015 and 3% beginning July 2015 and thereafter. These percentages will apply to members of the State Employees Retirement System (SERS) and the Alternate Retirement Program (ARP). Employees in these plans who are currently contributing 3% of compensation to the Retiree Health Fund will continue to do so without modification.
State employee members of the Teachers Retirement System (TRS) will have the amount of their required deduction to the Retiree Health Fund offset to reflect the health fund assessment they are paying pursuant to Section 10-183b-7 of the General Statutes. Because such members are currently making a 1.25% contribution to the TRS for retiree coverage they will not pay any additional contribution to the Retiree Health Fund from July 2013 through June 2014. Beginning in July 2014 affected TRS members will pay 0.75% of compensation to the Retiree Health Fund. In July 2015 and thereafter, (assuming no change in the TRS deduction amount) the Retiree Health Fund contribution for TRS members will be 1.75% of compensation. TRS members who are currently contributing at the rate of 1.75% will continue to do so without modification.
Deduction Start Date
The deduction start date will be based on each employee's first full pay period that begins after July 1, 2013. The new deductions will take effect on the dates specified below:
|Pay Frequency||Deduction Start Date||Effective Check Date|
Employees who are not currently contributing to the Retiree Health Fund will not be subject to the deduction if they retire on or before July 1, 2013.
Employees Subject to Contribution Requirement
Affected Employees include all persons not currently contributing to the Retiree Health Fund unless he or she:
Waiver of active employee health insurance does not relieve an employee from the obligation to make contributions to the Retiree Health Fund.
Exemption Based on Other Retiree Coverage.
An employee who seeks an exemption based on availability of other retiree
health coverage must provide the following documents: A completed CO-1300
application claiming an exemption, an Affidavit completed by his or her prior
employee substantiating the existence of alternative retiree health coverage
(CO-1303); and a Waiver of Retiree Health Coverage (CO-1304). All of these forms
are available on the Division website. This waiver cannot be revoked unless the
retiree coverage that is the basis for exemption subsequently becomes
unavailable—other than by reason of some action of the employee. Coverage as the
spouse or dependent of another retiree does not count for purposes of the
Compensation subject to Retiree Health Fund Contribution
The contribution to the Retiree Health Fund will be based upon earnings defined as salary in Section 5-154(h) of the Pension Agreement. In the event an employee has multiple part-time positions, which cumulatively make him or her eligible for healthcare coverage, the deduction will be based on compensation from all positions.
An employee who has both a full-time position, which entitles him or her to healthcare coverage, and a part-time position will have Retiree Health Fund contributions based on the full-time position only.
Effect of Leave on Duration of Contributions
Employees leaving State Service without Qualifying for Retiree Coverage.
An employee who leaves State service without qualifying for retiree coverage has the right to seek a refund of amounts paid into the Retiree Health Fund. If such employee is subsequently rehired, any service during which the deduction was previously collected will not count towards fulfillment of that employee's obligation to contribute to the Retiree Health Fund (or as actual state service for purposes of retiree healthcare eligibility) unless the employee repays the refunded amount in full.
Employees leaving State Service after qualifying for retiree health coverage are not eligible for a return of contributions to the Retiree Health Fund.
Updated Frequently Asked Questions will be posted on the Healthcare Policy & Benefit Services Division website shortly. 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.
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