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Healthcare Policy & Benefit Services Division
Division Memorandum 2017-03

TO THE HEADS OF ALL STATE AGENCIES

June 15, 2017

ATTENTION:    Personnel and Payroll Officers, Chief Administrative and Fiscal Officers, Business Managers
SUBJECT:    July 2017, Implementation of State Share for Retiree Health Fund

I. INTRODUCTION

The SEBAC 2011 Agreement required all healthcare-eligible employees to contribute to the Retiree Health Fund for ten years. Effective July 1, 2017, the State will begin matching the Retiree Health Fund contributions made by employees. The purpose of this memorandum is to explain the implementation process for the State share. Any changes to the Retiree Health Fund deductions that may result from current collective bargaining negotiations will be addressed in a future memorandum.

II. DISCUSSION

Payment of the State share to the Retiree Health Fund is scheduled to take effect with paychecks dated July 7, 2017. CORE-CT will insert a new deduction code in employee records via SQL during the week of June 19, 2017.

There will be two employer deduction codes. OPER will be used to match the 3% contribution paid by employees with deduction codes OPEB and OPE2. The OTER deduction code will be applied for members of the Teachers Retirement System currently paying 1.75% of compensation through deduction codes OTRS and OTR2.

Personnel and Payroll Officers should not remove the new deduction codes from employee records.

Coding in Core-CT Financials

The employer share OPEB amounts will be generated through HRMS/Payroll and posted to Core-CT financials using expenditure account 50423 - OPEB Employer Share. The employer OPEB expenditures will initially be charged to the same funding source that pays the employees’ salaries. Afterwards, the 50423 expenditures will be transferred through an automated Core-CT allocation process to central Employer Share OPEB appropriations within the Office of the State Comptroller’s budget. There will be two separate OPEB appropriations, one in the General Fund and one in the Transportation Fund. The employer share OPEB contributions will be deposited into the Other Post-Employment Benefits (OPEB) Trust Fund for investment by the Office of the Treasurer.

Deduction Start Date

The new employer contribution will take effect as follows:

Pay Frequency    Pay Period    Effective Check Date
Bi-weekly    6/9/2017--6/22/2017    7/07/2017
Special Bi-weekly    6/23/2017--7/6/2017    7/07/2017
Semi-Monthly    7/1/2017--7/15/2017    7/14/2017
Monthly    7/1/2017--7/31/2017    7/07/2017

Employees Subject to Contribution Requirement

The Healthcare Policy & Benefit Services Division will monitor implementation to identify any employee with a Retiree Health Fund deduction code that is not matched by the correct State share code.

All healthcare-eligible employees are required to contribute to the Retiree Health Fund with the exception of the following:

  1. Employees who are not eligible for State-paid healthcare coverage;
     
  2. Adjunct faculty members in higher education who are intermittently eligible for State-paid healthcare coverage;
     
  3. Employees who are not eligible to participate in a State of Connecticut retirement plan (for example, those holding J-1 or F-1 visas); or
     
  4. An employee who has qualified for an exemption based on availability of other retiree coverage.

Payment of State Share on Retiree Health Fund Adjustments

For those making additional contributions to the Retiree Health Fund under the ADJOPE deduction code, the matching State share code (ADJOER) will be applied only to deductions based on underpayment of Retiree Health Fund contributions arising from compensation paid on or after July 1, 2017. The State share will not be applied to repayment of Retiree Health Fund contributions refunded on or before July 1, 2017. The State share under the ADJOER code will be a matching fixed dollar amount rather than a percentage of compensation.

The Division’s Employee Benefits Unit will be responsible for determining whether payment of the State share is required for ADJOPE deductions. The forms for implementing ADJOPE deductions will be updated with new instructions regarding application of the State share.

III. CONCLUSION

Agency personnel with questions should e-mail Margaret.Haering@ct.gov  or telephone her at 860-702-3486.

Very truly yours,


THOMAS C. WOODRUFF, Ph.D.
Division Director

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