Payroll Contribution for Group Health Insurance

Overview

Applicable to

State agencies and institutions of higher education:

• Excluding components of the University of Texas and Texas A&M Systems
• Including public community and junior colleges

Summary

A provision in Senate Bill 1, 83rd Legislature, Regular Session, continues to require each state agency and institution of higher education (not including components of the University of Texas and Texas A&M Systems) to contribute an amount equal to 1.0 percent of the total base wages and salaries for each benefits-eligible employee to the Employees Retirement System's Group Benefits Program that began with the September 2011 pay period.

The Texas Comptroller of Public Accounts (Comptroller’s office) has published these rules and regulations to administer the program.

The Texas Higher Education Coordinating Board administers the requirements of this section for public community and junior colleges.

Citation

The General Appropriations Act, Article IX, Section 17.05, for the 2014–15 biennium.

Policy

Definitions

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.

Procedure

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:
  33273273277016

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.

SPRS Agency Examples

For state agencies reporting to the Standardized Payroll/Personnel Reporting System (SPRS), the 1.0 percent is reported as a state-paid PHC deduction. When combined with the State Contribution for Insurance (STH), the total is equal to the state-matching amount for health insurance. In other words, the STH amount is reduced by the PHC amount.

If an employee is eligible to opt out of state health insurance and receives the Opt Out (STO) funds for other voluntary insurance, the PHC reduces the STO payment up to the maximum of $60.

The Payroll Health Insurance Contribution is paid using each individual employee’s funding source (Program Cost Account or index) that is used to pay the employee’s base salary. For SPRS agencies, the state or agency paid deduction is reported by employee to ERS on the Daily Contribution file.

SPRS Monthly Example

Employee is paid $4000.00 BSY once a month and $80.00 of Longevity. The state contribution for insurance for the employee for the month is $503.14.

Monthly payroll – Paid on the first

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7002	4000.00
520	LOG	EE PCA		7022	*80.00
560	PHC	EE PCA	33273273277016	7042	40.00
560	STH	ERS PCA	33273273277024	7041	463.14

*Note: The PHC amount is not computed on the Longevity Pay.

SPRS Opt-Out Example (Where 1.0 Percent Exceeds $60.00)

Employee is paid $6500.00 BSY once a month and $120.00 in Longevity. Employee has taken advantage of Opt Out. Opt Out will be $0.

Monthly payroll – Paid on the first

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7002	6500.00
520	LOG	EE PCA		7022	*120.00
560	PHC	EE PCA	33273273277016	7042	**60.00

*Note: The PHC amount is not computed on the Longevity Pay.

**Note: The total for PHC does not exceed Opt Out amount.

SPRS Twice-Monthly Example

Employee is paid $2000.00 twice a month. The state contribution for insurance for the employee for the month is $503.14.

First half payroll – Paid on the 15th of the month

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7016	2000.00
560	PHC	EE PCA	33273273277016	7042	20.00
560	STH	ERS PCA	33273273277024	7041	483.14

Second half payroll – Paid on the first of the following month

Record type	Entitlement code	Program cost account	Identification number	Comptroller object	Amount
520	BSY	EE PCA		7016	2000.00
560	PHC	EE PCA	33273273277016	7042	20.00
560	STH	ERS PCA	33273273277024	7041	-20.00 (Adjustment to correct for amount sent on the 15th)

USPS Agency Examples

For state agencies using the Uniform Statewide Payroll/Personnel System (USPS), the state paid deduction 023 tracks the PHC amount. When combined with the state match for insurance, the deduction equals the total state match for insurance.

If an employee is eligible to opt out of state health insurance and receives the Opt Out funds for other voluntary insurance, deduction 023 reduces deduction 028 up to the maximum of $60.

USPS deduction 023 funds from the Program Cost Account or index used to fund the employee’s base salary.

USPS Monthly Example

Employee is paid $4000.00 BSY once a month and $80.00 of Longevity. The state contribution for insurance for the employee for the month is $503.14.

Monthly payroll – Paid on the first

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7002	4000.00
Longevity	EE PCA		7022	*80.00
PHC	EE PCA	33273273277016	7042	40.00
STH	ERS PCA	33273273277024	7041	463.14

*Note: The PHC amount is not computed on the Longevity Pay.

USPS Opt-Out Example (Where 1.0 Percent Exceeds $60.00)

Employee is paid $6500.00 BSY once a month and $120.00 in Longevity. Employee has taken advantage of Opt Out. Opt Out will be $0.

Monthly payroll – Paid on the first

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7002	6500.00
Longevity	EE PCA		7022	*120.00
PHC	EE PCA	33273273277016	7042	**60.00

*Note: The PHC amount is not computed on the Longevity Pay.

**Note: The total for PHC does not exceed Opt Out amount.

USPS Twice-Monthly Example

Employee is paid $2000.00 twice a month. The state contribution for insurance for the employee for the month is $503.14.

First half payroll – Paid on the 15th of the month

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7016	2000.00
PHC	EE PCA	33273273277016	7042	20.00
STH	ERS PCA	33273273277024	7041	483.14

Second half payroll – Paid on the first of the following month

Payment type	Program cost account	Identification number	Comptroller object	Amount
Base Salary	EE PCA		7016	2000.00
PHC	EE PCA	33273273277016	7042	20.00
STH	ERS PCA	33273273277024	7041	-20.00 (Adjustment to correct for amount sent on the 15th)

Higher Education Information

Applicable institutions of higher education continue to compute the Payroll Health Insurance Contribution by calculating 1.0 percent of the base salary paid to each benefits eligible employee for every payroll that began with the September 2011 payroll month.

The Payroll Health Insurance Contribution amount is reported as part of the TEXNET or recurring transaction index (RTI) process each month. A line item is included in TEXNET, and an RTI number exists to facilitate reporting.