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Why Change to Direct Billing?

May 1, 2024

As outlined in the OSSTF ELHT 2023 Annual Report the change to direct billing of required member premium contributions for all eligible OSSTF members offers the following advantages:

  • For direct billing, the calculation of the amount to be taken from the member’s bank account is done around the 3rd or 4th business day of the current month. This is at least 2 weeks later than the timing of reporting payroll deduction premium payments to boards, which makes the premium amount that is billed to the member more accurate and up to date.
  • Under the current payroll deduction process, payroll schedules vary by board and bargaining unit. Some boards take deductions from one pay a month; others take pro-rated deductions from each pay of the month. Direct billing pre- authorized deductions (PAD) will take monthly member contributions on the 10th day of each month.
  • 10 month pay schedules are in place for some bargaining units where members have benefit eligibility for the full 12-month basis. A process had yet to be set up each year for double payroll deductions (typically for May and June) to collect premiums for July and August. Direct bill PAD will collect monthly premiums each month annually, including the summer months.
  • If a member has a status change during the period that the double deductions are being processed a retroactive reconciliation must be completed by OTIP, which results in the member owing additional premiums or being owed a premium refund. An example of this is when a member retires effective at the end of June, but the double member contributions were deducted during May and June. When the retirement is reported to OTIP, a reconciliation of the overpaid premium for July and August needs to be completed and the overpayment needs to be refunded to the member who is no longer on the board’s payroll. This will not apply under Direct Bill PAD as double deductions will no longer be taken.
  • The transition between payroll deduction for active and direct bill for members on leave is confusing to members. Under direct billing PAD, members will still have the election to continue all or only some of their benefits during an approved leave of absence, and reinstatement of any suspended benefits upon their return to active duties, but the method of collecting member premium contributions will not change.
  • Many times, the change from active to not active or vice versa is reported close to or past the start date of the leave, or the start date of return to active duties. This results in required retroactive status changes and a reconciliation of premium collected via payroll deduction and Direct bill PAD because of the reported change in status.
  • It is essential for the Plans to be properly funded and that includes accurate, member premium payments. Direct billing PAD helps to ensure, in a timely manner, that the Plans receive the proper premium payments from members and that members are not overpaying or underpaying.

At this point in time credit card payment of member contributions towards the benefits is not available.  Alternate payment methods will continue to be investigated going forward.

The information in this document is provided by OSSTF Benefits for general information only. OSSTF Benefits endeavours to have all information current and accurate. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information included. All information is subject to change without notice.

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