Benefit deduction make-up payments to appear on Aug. 3 paychecks

July 30, 2007 - In a memo sent today to agency human resources personnel, the state's benefits administrator described how employees' Aug. 3 paychecks will correct health care deductions that were supposed to be incurred on recent pay checks.

Refunds for incorrect deductions should have been provided in the July 20 paycheck to start the correction process.

Last week the Department of Administrative Services had informed OCSEA that employees who changed health care plans or coverage during open enrollment may experience a problem with the deduction amount on June pay checks.

Editor's Note: The text below represents a copy of an email sent to OCSEA by the State of Ohio.

To:        All Agency HR and Benefits Administrators         
From:    James W. Knight, BAS Benefits Administrator
Date:    July 30, 2007
RE:       Benefit Deduction Make-up payments appearing             on 8/3/07 paychecks

Please be advised that approximately 2,000 employees will have additional deductions taken from their August 3, 2007 paycheck.  These deductions will be to “make-up” for missed deductions during previous pay periods.  There are two reasons an employee could have a make-up deductions.  First, some employees missed previous deductions due to changing benefit options during open enrollment.  The employee changed benefit plans but the associated changes in deduction amounts did not get updated properly and no deduction was taken for the 7/7/07 paycheck.  Second, some employees have make-up deductions for payments that were not taken during earlier pay periods this year.  In most instances, the employee is only making up one missed deduction payment.  In many cases, however, several missed deductions are owed.  In some extreme cases, employees owe several hundreds of dollars in make-up payments.

Even though deductions were not taken for some pay periods, all employees and their dependents that were enrolled in medical insurance plans have been and will be continuously covered. 

Employees who owe approximately $200.00 or less will have the entire amount deducted from this August 3, 2007 paycheck.   Employees who owe more than $200.00, will have $200.00 deducted from this paycheck and additional payments will be taken from subsequent paychecks.  The amount of the subsequent payments has yet to be determined but will be less than $200.00.
All make-up payments, whether they are the full payment or a partial payment, will be in addition to the regular medical insurance premium payment.  Also, all payments will be pre-tax dollars.  Please note that for tax purposes, all premium payments are paid pre-tax and none of the deductions for medical premiums, regardless of when they are deducted, are subject to state or federal taxation.

In the process of attempting to identify and correct the medical deduction status for all state employees as necessary, approximately 1000 employees had an additional deduction equal to ½ of their normal medical premium deduction taken from their paycheck for August 3, 2007.  This should amount to approximately $25.00 for single coverage employees and $65.00 for family coverage employees.  These are both pre-tax figures.  The actual reduction in net pay will be less than those amounts.  This issue will be addressed on the next paycheck scheduled for August 20, 2007 and affected employees will receive a refund for the excess make-up payment.

We recognize that an unexpected deduction of any amount, but particularly of amounts approaching or equaling $200.00 will have a significant impact on state employees.  It should be noted that during the time the deductions were not correct; these employees received more on their check than they would have normally received.  The staff at DAS/HRD and at OAKS is working diligently to work through these issues so that they do not continue.  We know that your patience is not limitless and we pledge to do everything in our power to do better in the future.

Later today you will receive a list of the affected employees in your agency.  The list contains the employee’s name, the total amount of the make-up payments, and the amount that will be taken in each paycheck.  We hope this list will assist you in providing information to your employees.  While we realize that some employees will be very distressed over this situation, we did not feel that we could jeopardize the integrity of the current payroll processing to address issues relating to the size of the current make-up payment.  For those who owe more than $200.00, we will address the size of subsequent payments in the next week and will make adjustments as necessary.

If you have questions, please contact the customer service unit at 1-800-409-1205.

See Related

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