Payroll Contribution for Group Health Insurance
The Comptroller’s office, in conjunction with the Employees Retirement System of Texas (ERS), determined that 1.0 percent is calculated as a percentage of the amounts of base salary paid to benefits-eligible employees each payroll month:
- An employee of a state agency is considered to be a “benefits eligible employee” if he or she has a state contribution for health insurance or an Opt Out payment for that payroll period.
- An employee of an institution of higher education is considered to be a “benefits eligible employee” if he or she is eligible for benefits including health insurance and receives either an employer contribution (regardless of fund source) for health insurance or the Opt Out amount.
The amounts paid as base salary do not include any other emoluments that are sometimes paid using the salary expenditure object code. Total base salary does not include:
- Longevity pay
- Hazardous duty pay
- Benefit replacement pay
- Overtime pay
- Other payments that are not part of the base salary of the employee
No deduction will occur:
- When the employee is on a full-month’s leave without pay, even in Family and Medical Leave Act situations.
- For employees in the 60-day wait, since there is no state paid amount of health insurance or Opt Out amount.
The Payroll Health Insurance Contribution (PHC) deduction started with the September 2011 pay period.
The PHC is paid using:
- Comptroller expenditure object: 7042 – Employers Payroll Premium Contribution for Group Health Insurance
- Texas Identification Number (TIN) to which the payment is made:
Institutions of higher education include the 1.0 percent payroll contribution each month directly in their remittance to ERS.
For state agencies:
- The 1.0 percent payroll contribution adjusts the state match for insurance or Opt Out option up to but not more than the total state match for each benefits eligible employee.
- The PHC deduction adjusts for situations in which the employee receives partial pay.
- The PHC is due the first of the month for employees paid monthly and as follows for twice-monthly paid employees.
Twice-Monthly Paid Agency Employees
For twice-monthly paid employees at state agencies, the state paid portion of insurance and the Opt Out amount are paid to ERS on the 15th of the month:
- The PHC is calculated on actual base salary (BSY) for the first half of the month (paid on the 15th of the month) and reduces the state paid portion of insurance or Opt Out amount.
- The PHC is calculated again on the actual BSY for the second half of the month (paid on the first of the following month because of the need to know the total amount of base salary for the month).
- A negative amount reflecting the calculated PHC for the second half payroll is recorded in the state paid portion of insurance or Opt Out amount up to the total amounts scheduled for the month (including first half of the month’s contributions to the PHC).
See applicable examples for the payroll system used by your agency.