Earlier this month ORS informed you of PA 120 of 2024 and 3% employee healthcare contributions, indicating we would update you as more information became available.

To summarize: PA 120 of 2024 includes an appropriation, Sec. 147g, to be used to reimburse employees with the premium subsidy healthcare benefit for their required 3% employee contribution. The bill states that the payments will be included in State Aid payments and that employers should reimburse members who made contributions in FY 2025.

ORS has been working with several departments to continue to hammer out the details. The work is ongoing, but a Frequently Asked Questions page on the Employer Information website reflects what we currently know. We will update it regularly as new specific information becomes available.

Here’s a summary of key information, including a few new details. Refer to the FAQ for additional information.

• Employers must continue to withhold and remit the 3% contributions from employees.
• The amount allocated to each reporting unit will be based on the payments their employees contributed to healthcare in fiscal year 2025.
• The State Aid payments were initially planned for November but will likely be delayed.
• Reimbursement payments to members are taxable.
• Reimbursement payments are not reportable on DTL2 but are reportable on DTL4 records, unless the employee has retired or terminated before the payment is made.

In addition, PA 120 of 2024 states that if the member 3% contribution is removed through legislation, the employer will retain the Sec. 147g funding for other post-employment benefit (OPEB) normal costs. If any legislation passes that would impact the 3% healthcare contribution, we will provide further guidance at that time.

Most reporting units have submitted their data regarding their payroll schedule and the pay periods around September and October when the new state fiscal year begins. Thank you to all who completed the online form, which is now closed.

Your compiled responses create a report that our Benefit Plan Design team uses to estimate a total for wages earned in September but paid in October – part of our fiscal-year-end accounting. In the big picture, your responses help strengthen the long-term health of the retirement system.

This year, we’ll help you and your employees answer the question, How do I plan for a successful retirement? Watch your email for more details on the Q&A sessions and tools that will be available throughout October.