ORS 3% Healthcare Contribution Refund
If you are a former employee – click here
January 29, 2018 update
As stated in Friday’s (January 26th) email, active employees have the option of making a one-time contribution to their 403b/457 accounts with the ORS 3% Refunds being paid on February 16.
If you do not wish to make a one-time contribution to your 403b or 457 Plan with the February 16 payment of the ORS 3% refund amount, there is no further action needed from you, and you can disregard this message.
To assist with your decision, please find below a worksheet to help you determine the amount of your contribution. Simply enter the base amount of your refund and then the amount of the interest, and the spreadsheet will calculate the total amount you will have available to contribute. Note that 403b/457 plan contributions are subject to FICA/Medicare but exempt from Federal and State withholding.
You may choose to contribute only a portion of your refund amount, but the spreadsheet will show you the total amount you will have available to contribute. If you choose a lesser amount, the difference between your refund amount and your 403b/457 contribution will be subject to Federal ans State withholding. The resulting net amount will be directly deposited into the bank account you have designated for your “NET” check.
Once you have determined the one-time amount you wish to contribute on February 16 with your refund, follow the steps below:
- Complete the Omni 403b or OMNI 457 “ORS 3% Refund One Time Contribution” form. Indicate the amount of your contribution using the amount calculated on the spreadsheet to contribute the entire refund amount, or indicate a lesser amount.
- These same Omni forms were attachments to email and are available on Staff Links as well. You must use this form to make this one-time election. Do not complete an online form for this one-time contribution. These customized forms cannot be used to elect your normal payroll contributions.
- Submit the completed form to the Payroll Office via mail or fax at (248) 449-1215. Do not submit forms via email.
- The Payroll Office must receive completed forms by 4:30 pm, Friday, February 9, 2018.
- This is a strict deadline. Forms received after , Friday, February 9, or forms received via email, will not be processed.
403b/457b Contribution Calculation
January 26, 2018 update
As we’ve previously communicated, the Michigan Supreme Court ruled PA 75 of 2010 unconstitutional. This public act required all public school employees to contribute 3% of their wages to fund retiree healthcare. The Office of Retirement Services (ORS) set these contributions aside in a low-interest bearing escrow account as required by law. As a result of the court ruling, the healthcare contributions must be refunded to the employees along with interest earned.
On January 9, 2018, ORS forwarded the names and amounts for the refunds to school districts. On January 22, 2018, ORS distributed lump sum dollar amounts to school districts to distribute the refunds.
Since the time of the ruling, Novi Community Schools has sought guidance from its tax and audit professionals for the correct tax treatment of these refunds and other IRS considerations.
The information set forth below details the district’s comprehensive plan for returning these refunds to active employees. Please read the information carefully.
The pay date for the refunds will be Friday, February 16, 2018. Refunds will be directly deposited into the bank account you have designated for your “NET” check. Because these earnings were not originally subject to tax, we must now withhold federal, state, and social security taxes. If applicable, garnishments and one-time 403b/457b contribution elections (explained in detail below) will be deducted from this pay. No other deductions will be taken, including retirement. Funds will be directly deposited to the bank account you selected to receive your “NET” pay on your current direct deposit authorization form.
According to IRS guidance, per Notice 1036, revised January 2018, the ORS 3% refund is to be treated as 2018 “supplemental wages” which requires a flat 22% withholding. This withholding cannot be altered and therefore we cannot accept revised W-4 withholding amounts for this special pay on February 16, 2018.
Your current State withholding election will apply.
The current 6.2% FICA and 1.45% Medicare withholdings will apply.
Employees with current garnishments requiring withholding from all sources will be deducted. Court orders requiring withholding from semi-monthly paychecks, such as Friend of the Court, will not be withheld. Please refer to your specific court order for details.
Omni 403b/457b Contributions:
The elections currently on file for your recurring semi-monthly 403b/457b contributions will not be withheld from these refunds. However, we are pleased to announce that we have coordinated with Omni the ability for employees to make a one-time contribution to their open and active 403b or 457b plan using your refund amounts. Employees with active plans will be allowed to make a one-time contribution, subject to IRS 2018 contribution limits.
Employees currently contributing to a Voya Financial plan through the State of Michigan are not eligible to make this one-time contribution to that plan.
If you wish to open a new account through Omni for the purposes of making a one-time contribution, we cannot guarantee your vendor will review your application and activate your account by the deadline below. For more information about Omni 403b/457b plans, please refer to Staff Links under Payroll Information/Forms.
To take advantage of this opportunity for a one-time contribution election, please follow the steps below:
- Complete the Omni 403(b) or Omni 457 “ORS 3% Refund One Time Contribution” form. You must use this form to make this one-time election. Do not complete an online form for this one-time contribution. These customized forms may not be used to elect your normal payroll contributions.
- Submit the completed form to the Payroll Office via mail or fax at (248) 449-1215.
- Completed forms must be received by the Payroll Office by 4:30 pm, Friday, February 9, 2018.
- Forms received after the deadline, or via email, will not be processed.
Important note: Election forms for normal ongoing contributions must continue to be submitted directly to Omni.
Your pay stub will separately itemize the amount of your refund and the amount of interest. The interest amount is not subject to tax payroll taxes, however, you must report this interest income when you file your 2018 taxes. It is not known yet at this time if you will receive a 1099-INT for this interest amount from the State of Michigan.
If you were employed by another school district between July 1, 2010 and September 4, 2012, you will receive separate refunds from each district. Novi’s refund relates only to the wages earned as a Novi employee. To ensure you receive your refund from your former district(s), we encourage you to provide your current contact information to them.
Refunds for inactive and retired Novi employees will be handled separately.
If you have questions or need clarification, please contact Jody Malbon, Payroll Supervisor, at x1416 or Jody.Malbon@novik12.org, or Jill Minnick, Assistant Superintendent of Business and Operations, at x1209 or Jill.Minnick@novik12.org.
January 12, 2018 update
As updated yesterday, ORS will email the amount of your refund to you. If you need to update your email address in MiAccount, you will need to do this by this Monday, January 15.
This update is intended for those who do not have a current email address on file with ORS and need to update it in miAccount.
If you have forgotten your MiAccount log in information, but know your member ID#, you can click “tell me my user name and reset my password” on the MiAccount login page. If you do not know your member ID, you will need to click “mail my member ID” and ORS will then mail your member ID to you via USPS. Clearly, there is not enough time for the letter to come in the mail for Monday’s deadline.
We have learned that you can call ORS at 1- 800-381-5111 and request your member number over the phone and for your log in information to be re-set. Wait times are long, but you can request them to call you back. ORS is, in fact, calling members back, and members are getting their member numbers and email addresses updated. They are open until 5:00pm today.
ORS offices are closed for the holiday on Monday. If for some reason you are unable to get through by phone today or they don’t call you back, please continue with the process of requesting your member number by mail. ORS stated they anticipate updating MiAccounts with the refund amounts (in addition to the emails) so even if you don’t get the email, you can check your MiAccount for your refund amount.
January 11, 2018 update
ORS made extensive updates to their FAQ overnight (click here to go to the ORS 3% Refund FAQ).
The most significant change is the announcement that ORS will be notifying members of their refund amounts via email; here is an excerpt:
“How much money will be refunded to me?
ORS will notify members of their refund amount by email on or before January 22, 2018. If you need to update your email address with us or are not sure if the one we have is current, please log in to miAccount by January 15th to review and update your profile with a current email address.”
Please be sure your miAccount profile is up-to-date by January 15 in order to receive your notification.
To log in to your MiAccount, please visit:
For additional MiAccount assistance, please call ORS at 1-800-381-5111.
We will continually update the NCSD ORS 3% Refund webpage as we receive more information.
January 10, 2018 update
ORS previously announced they would send to school districts a data file with employees’ names and corresponding refund amounts today, January 10. As stated in their Refund FAQs, ORS also announced they would be notifying each member of their refund amounts via member miAccounts.
We understand everyone is eager to find out their refund amounts. If ORS is unable to load this information into the miAccounts within the next week, we will explore alternate means of disseminating this sensitive information to employees.
Please be patient with ORS as they attempt to provide this information to you. The business office is working expediently to process W2s and ORS refunds and will not be providing individual refund amounts unless it is apparent ORS is unable to do so by the end of next week.
To log in to your MiAccount, please visit:
For additional MiAccount assistance, please call ORS at 1-800-381-5111.
We will continually update this NCSD ORS 3% Refund webpage as we receive more information.
January 8, 2018 update (clarification)
One more important clarification:
Novi Community School District will be issuing the refunds for anyone employed with Novi between 7/1/10 and 1/31/13, including retirees and terminated employees.
At the bottom of this webpage there is a link for former employees to submit to us their current contact information, including address, phone, former name if applicable, etc. If you know someone who worked for Novi during that timeframe, please forward this information to them.
Current Novi employees employed by a different district at any time between 7/1/10 and 1/31/13 will receive their refund from that district, and should provide their current contact information to their former district's payroll department.
January 8, 2018 update
The Michigan Supreme Court recently upheld a state Court of Appeals ruling that PA 75 of 2010, which mandated members to contribute 3% of their compensation to the Retiree Healthcare Fund between 2010 and 2013, is unconstitutional and that member contributions, currently held in escrow, shall be refunded to members.
The Office of Retirement Systems is working to notify members of the amount of their refunds. School districts will also receive this information on January 10, 2018, and a lump sum refund on January 22, 2018; Novi Community School District will then in turn redistribute the refunds to current and former employees. Because the contributions were withheld on a pre-tax basis, we are seeking guidance on whether the refunds are subject to taxation. Once we have all of the information, we will communicate a specific payment date for the refund, but we anticipate it will be in February.
Although more details will be forthcoming, ORS has created a Frequently Asked Questions (FAQ) page to help answer questions you may have at this time. Please check the ORS FAQ document frequently for the latest information on this topic.
The Novi Community School District is committed to processing the refunds as quickly as we are able, in accordance with forthcoming guidance, and will update this webpage with the latest information as we receive it.