Among several changes to retirement reporting, Public Act (PA) 127 of 2024 eliminated the 3% member contribution requirement for members with the premium subsidy healthcare benefit beginning Oct. 1, 2025. See ORS’ Summary of PA 127 of 2024 for details on other changes.
Members who have the premium subsidy benefit are no longer required to contribute 3% toward future healthcare benefits. This includes most members with defined benefit plans and some Pension Plus members.
Reporting units are expected to review their payroll records for a list of employees impacted. You may choose to use the Download Detail, which has a column (Column D) showing those with the 3% healthcare contribution. See the Reporting Instruction Manual Section 7.01.08: Using the Download Detail link.
Employers will absorb the health normal cost that members with the premium subsidy benefit formerly paid. However, the health normal cost contribution floor is removed, which means the health normal cost contribution for a subsequent fiscal year (FY) can be less than the previous FY. The pension normal cost contribution floor is still in place.
No, do not withhold the 3% on a record with an end date on or after Oct. 1, 2025. Contributions are based on when wages are paid, not earned.
For adjustments to any DTL2 records first submitted before Oct. 1, 2025, the system will calculate the 3% contribution rate.
Eligible members received an email from ORS about the rate change. Those who don’t have an email on file with ORS will receive a letter about the change.
This is different. Any reimbursements your reporting unit have made to members in FY 2025 were based on PA 120 of 2024, not PA 127 of 2024. See employer FAQs for MPSERS 3% healthcare reimbursement (Sec. 147g). In short, PA 120 of 2024 required you to withhold 3% from eligible members, then reimburse it. Those payments were considered reportable on a DTL4 record.
In contrast, PA 127 of 2024 requires you to stop withholding the 3% completely, beginning Oct. 1, 2025. As a result, members’ pay will be higher and the 3% more they take home will be subject to tax in the year it was earned.
For members who received 3% reimbursements in FY 2025, the difference in their pay may not be large — the difference may be felt primarily in the tax implications.
