Public Act (PA) 120 of 2024, the school appropriations bill for state fiscal year 2024-25, has a new section, Sec. 147g, related to the 3% employee healthcare contributions made by public school employees with the premium subsidy benefit. The Office of Retirement Services (ORS) is currently reviewing this section of PA 120 of 2024. Here’s what we know at this point.
Reporting units (RUs) must continue to withhold the 3% healthcare contributions from these employees and remit those contributions to ORS, as you already do in your normal process. Do not make any reporting changes at this time.
Distributions to RUs
The new budget section allocates $181.5 million to be distributed to MPSERS RUs (excluding universities). Your RU will receive a proportionate amount of this allocation, based on the healthcare contributions collected from your RU. The allocation will be disbursed through your School Aid Fund payment starting in November, but the timing is subject to change.
PA 120 of 2024 states that this allocation is intended as reimbursement for employees with the premium subsidy healthcare benefit but notes that future legislation may impact how the money is to be used. If any legislation passes that impacts the 3% employee healthcare contribution, we will notify you and provide further guidance.
This new reimbursement doesn’t apply to employees with the Personal Healthcare Fund or retirees who have returned to work.
Employee reimbursement process
RUs will need to plan for how they intend to reimburse their employees for their 3% healthcare contributions. There is no process or frequency prescribed in PA 120 of 2024, and ORS will direct employees to speak to their employer with questions about the process.
As we learn more, we will promptly share the information with you. Watch for updates about how this allocation will be distributed and the reportability and tax status of reimbursement payments in our newsletter on Sept. 18, or sooner if new details emerge.
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