PA 75 and 3% Healthcare Contributions Repayment Information

The district is issuing Healthcare Trust Refunds to all eligible employees on March 19th, 2018.

Current Employees: Your refund will be processed through your standard payroll process (Direct Deposit or ALine Card).

Retirees: Your refund will be mailed to the home address you have on file with ORS or if you updated your contact information with HR.

Former Employees: If you verified your home address through PeopleSoft Self-Service or through HR by February 28th, then your check will be mailed to your home address.

If you did not verify your home address, then your check will be available for pick up at the Fisher Building starting on March 19th. You will need to bring a valid photo ID to pick up your check.

Beneficiaries of Deceased Employees: Please contact healthcare.refund@detroitk12.org, to get additional information on required information to process a refund.

Hours and Location for Healthcare Trust Refund Pick-up

  • Monday, March 19, 7:30AM – 7:00PM, Basement of the Fisher Building, 3011 W. Grand Blvd..
  • Tuesday, March 20, 7:30AM – 7:00PM, Basement of the Fisher Building, 3011 W. Grand Blvd..
  • Wednesday, March 21, 8:00AM – 6:00PM, 11th Floor Fisher Building, 3011 W. Grand Blvd..
  • Thursday, March 22, 8:00AM – 6:00PM, 11th Floor Fisher Building, 3011 W. Grand Blvd..
  • Friday, March 23, 8:00AM – 6:00PM, 11th Floor Fisher Building, 3011 W. Grand Blvd..

Starting March 26, and thereafter the Healthcare Trust Refund will be available from DPSCD Payroll Department during regularly scheduled business hours – 8:00AM – 5:00PM.

If you have any additional questions, please contact healthcare.refund@detroitk12.org.

On January 19, 2018, eligible (current and former) staff members received an email from the Michigan Office of Retirement Services (“ORS”) regarding the PA 75 and 3% Healthcare Refund that they have been court ordered to pay eligible persons (“ORS Refund”). If you did not receive an email and you believe you are eligible for the ORS Refund, then you should contact ORS to ensure they have your updated contact information.

The refunds are being processed the same as the original deductions – through the eligible staff members’ employer. Because the deductions occurred during the operations of the old district- Detroit Public Schools (“DPS”), the funds will be refunded through DPS (old district) and not the new district, Detroit Public Schools Community District (“DPSCD”).

DPS received the funds from ORS to process the refunds to eligible staff. The district will process approximately 14,000 refunds to current and former employees.

The district will refund the actual 3% healthcare contribution amount withheld by the district between July 1, 2010 and August 24, 2012. This amount may differ from the amount that was reported to you by ORS. The district will email you a copy of your earnings history by March 13, which will show the amount that was withheld during this time period. This amount plus interest will be repaid to employees on March 19, 2018.

Current employees through their standard payment method.

Former employees, who have retired, and former employees who verified their home address through PeopleSoft Self-Service by February 28 will be mailed a check. Please allow 10 business days for the delivery of the check.

Former employees who did not verify their home address will have to visit the Payroll Department, 11th Floor Fisher Building after March 19, 2018.

Frequently Asked Questions

What amount is being refunded?

The district will refund employees the 3% healthcare contributions plus interest that were made between July 1, 2010 and August 24, 2012. The paycheck date for this time period starts on July 27, 2010 and ends on September 4, 2012.

In many instances the refund amount stated by ORS will not match the actual withholdings made by the district.  The district will refund you the actual amount withheld plus interest, not the amount indicated by ORS.

Why is the amount being refunded different from the amount indicated by ORS?

ORS determined the refund based on the wages reported by the district not the actual amount withheld by the district. The district is refunding all actual 3% healthcare withholdings made by the district from the employee.

The district will refund all eligible 3% healthcare contributions that were withheld by the district between July 1, 2010 and August 24, 2012 plus interest.

How will I know how much was withheld by the district?

The district will provide an earnings history report for each current and former employee which shows the amount withheld. These reports will be emailed to all current employees DPSCD email address on March 13.  Former employees will receive the report to the email address on file with ORS on March 13.

Current and former employees may request a copy of the earnings history report by sending an email to healthcare.refund@detroitk12.org.

Why is there a refund of the 3% employee withholding for healthcare?

The Michigan Supreme Court issued a unanimous opinion upholding the Appeals Court ruling that Public Act 75 of 2010, which was in effect from July 1, 2010 through September 3rd, 2012, was unconstitutional and that the 3% employee withholdings mandated by Act 75 must be returned to public school employees. The amount that was withheld from employees while Act 75 was in effect will be refunded with interest.

What employees are affected by the 3% Healthcare Contributions?

All employees who were reported by their employer to ORS between July 2010 and September 2012, will have their 3% healthcare contributions during that period returned to the reporting unit who originally reported the amounts for refunding.

According to ORS the healthcare refund will only be based on payroll pay dates that fell between 7/1/2010 and 9/3/2012. For Detroit Public Schools the pay date of 9/4/2012, for the work period 8/11/2012 – 8/24/2012 is not included in the refund. The 3% healthcare contributions starting 8/11/2012 were deposited into the appropriate accounts, depending on the member’s election. For additional questions, please contact Michigan Office of Retirement Services.

What about healthcare deductions made between September 4, 2012 and February 1, 2013?

The period for which contribution refunds is due ends on September 3, 2012 because PA 300 of 2012—the law that provided members a healthcare benefit election—took effect on September 4, 2012. For the period between the law’s effective date and its implementation (9/4/2012 – 2/1/2013), healthcare contributions were deposited into the appropriate accounts, depending on the member’s election. For members who elected the Personal Healthcare Fund, contributions were deposited into their 401(k) accounts with Voya Financial® in February 2013. ORS sent a letter dated February 26, 2013 with the estimated amount of the transfer. For those who elected the Premium Subsidy option, contributions were deposited in the Retiree Healthcare Fund, to fund that benefit upon members’ retirement. Please contact ORS with any specific questions regarding these funds.

Is interest included on these contributions?

Yes, interest will be included with the contributions when they are returned. The courts directed the administration to maintain the funds in a capital preservation escrow account, which accrues a very minimal amount of interest. ORS and not DPS will determine the interest amount for each refund, unless otherwise necessary.

When will I get my 3% healthcare refund?

Detroit Public Schools is planning to issue refund checks on March 19, 2018 to current employees and former employees who have verified their mailing address.

I am a current employee, how will I get my refund?

Current employees will be paid through an off-cycle payment using their standard payment method. The payments will be paid through Detroit Public Schools.

I am a former employee, how will I get my refund?

Former employees who are receiving a pension check from the Michigan Office of Retirement Services will receive a check from Detroit Public Schools.

Former employees who did not verify their home address by February 28, 2018, will be required to pick up their check from the Payroll Department, 11th Floor Fisher building.

Former employees who were receiving their check by mail should expect to receive their checks within 10 business days. If you have not received your check by April 2, 2018 you should contact the district payroll department.

The former employee is now deceased, who gets their refund?

If the estate of the former employee is still open, then the refund will be processed to the estate. If the estate is closed, Michigan Law dictates order of heirs = first, surviving spouse, then children, then parents, then siblings.

The former employee is now deceased, what do I do?

The beneficiary (s) or the personal representative of the estate must provide the following documents to receive a payment for the deceased employee:

  • Copy of the Certificate of Death, must have the raised seal on the document (required)
  • Letters of Authority for Personal Representative provided by the Probate Court which must be notarized with the notary’s raised seal placed on the document (required)
  • If you do not have the certificate of death and the letters of authority for personal representative, you will need an application for money due to a deceased employee. This form must be notarized by a notary who has a raised seal affixed to the document. The beneficiary or personal representative would submit that to the Probate Court to receive the notarized document to provide to the district. (form in the Payroll Department)
  • DPSCD Supplier Request & Information Change Form with mailing address (form in the Payroll Department)
  • W-9 Form must be completed (forms in the Payroll department)

Once all the documents are received in the Office of Payroll, a check will be mailed to the beneficiary or personal representative within 7- 10 days.

I am a former employee and my name has changed since I worked at the district.

Former employees will need to verify their former name through official documents. This must include a current picture ID and a copy of a marriage license, divorce decree, social security card or other official documents which show the original name.

I am a former employee, and I want to be paid through Direct Deposit or ALine Card.

All former employees will receive their ORS Refund and interest payment in a check issued by Detroit Public Schools. The district is not able to accommodate requests for direct deposit or ALine cards.

I am a former employee, how do I verify my mailing address?

The deadline for verifying your home address through PeopleSoft Self-Service was February 28, 2018.

I am a former employee, and I did not verify my home address, how do I pick up my refund check?

Former employees who are not retirees, will need to come to Payroll Department, 11th Floor Fisher Building after March 19, 2018 to pick up their check. Healthcare refund checks will only be provided to former employees who present valid identification.

I already submitted an updated mailing address; do I have to verify my information in PeopleSoft?

We are asking all former employees who are not receiving a pension check from ORS to verify and if necessary update their address through the PeopleSoft Self-Service portal between February 5 and February 28, 2018.

Why are the refunds being paid from Detroit Public Schools?

Since the deductions occurred during the operations of DPS (old district), ORS transferred the funds to the old district. Therefore, the repayments will be made to eligible staff through DPS and not DPSCD.

Will my refund be taxed?

The 3% healthcare deductions were made pre-tax; therefore, the refunds are now considered income and subject to taxes. The interest earned on the refund is not taxable. This tax rate will be applied to only the refund portion and not the interest. The interest will not be taxed.

How will the new tax rates impact my refund?

The 2018 federal tax rate for married individuals is 0% for earnings less than $11,500. For single individuals the tax rate is 0% for earnings less than $3,700 and then 10% between $3,700 – $13,225. The refund will be subject to additional state and other taxes where applicable.

Do I need to submit a new W-4?

Former Employees – No, the district retained your last W-4 on file. If you would like to update your W-4 you can do this through the Self-Service Portal. The district will not be able to accommodate in paper requests to change W-4s.

Current Employees – No, the district will use your current W-4 on file with DPSCD.

I did not receive an email regarding my refund.

Please contact the Michigan Office of Retirement Services to ensure it has your updated contact information and to get the email resent to you. The district does not have this information and cannot send an email.

Who do I contact if I have a question about my refund?

If you have a question about your ORS Refund amount or the interest, please contact ORS. The district was not involved in the calculation of the refunds or the interest payments and cannot answer any questions. If you have a question about the timeline for refund or a question about verification process, please email the district at healthcare.refund@detroitk12.org.

What happens if the check is not picked up?

The district will hold refund checks for one calendar year, and then return them to the Michigan State Unclaimed Properties Department. After one-year former employees will need to collect their refund checks from the Michigan State Unclaimed Properties Department.

If I have questions who do I contact at Detroit Public Schools Community District?

Send your questions regarding Timing of Refund, Verification Process, or Taxes to healthcare.refund@detroitk12.org and a DPSCD staff member will be in touch.

Where do I get information from the Michigan Office of Retirement Services?

To obtain contact information or get more information you can visit the ORS website.

Refund Process

Below is the process for how the district will process the refunds to current and former employees.

Current Employees (Including Retirees)

  1. Your refund and interest payment will be processed through an off-cycle payment on March 19, 2018 using your standard payment method. The payment will be made to you from Detroit Public Schools (old District).

Former Employees (Receiving a Pension Check from ORS)

  1. The district received your updated mailing address from ORS. Your refund and interest payment will be issued as a check on March 19, 2018 and mailed to the address we have on file from ORS.

Former Employees (Not receiving a Pension Check from ORS)

  1. If you confirmed your address through the PeopleSoft Self-Service portal by February 28, then your check will be mailed to you on March 19, 2018.
  2. If you did not verify your home address through PeopleSoft Self-Service then you will need to come to the Payroll Department, 11th Floor Fisher Building after March 19, 2018 to pick up your check.
  3. The district will hold checks for one calendar year and then will transfer funds to the Michigan Department of Treasury.

Deceased Former Employees

If the estate of the former employee is still open, then the refund will be processed to the estate. If the estate is closed, Michigan Law dictates order of heirs = first, surviving spouse, then children, then parents, then siblings.

  1. Heirs will need to provide documentation that former employee is deceased, and they are the next living heir, based on the order outlined above.
  2. Please contact the district at refund@detroitk12.org to get more specifics on the process.