Exemption from OPERS/Medicare for Student Employees

All Ohio public employees are exempt from paying social security.  As of April 1, 2005, the optional exemption from participation in Ohio Public Employees Retirement System (OPERS) and the corresponding exemption from Medicare taxation are no longer available to student employees (including graduate assistants) not “enrolled and regularly attending classes.” Therefore, doctoral candidates who have completed other requirements and are not enrolled while working on their dissertations are not eligible for the exemption.

Note that eligibility for the OPERS exemption continues to be based upon the statutory exception from social security and Medicare for student employees under the Federal Insurance Contributions Act (FICA). In 2005, the IRS narrowed the definition of a student such that individuals who are no longer engaged in classes or structured, supervised research activities that are necessary to complete degree requirements clearly do not qualify.

The final regulations also make the overall assessment of student status for purposes of the FICA exception subject to more stringent criteria than in the prior rules. One important change is that a "full-time" student employee (i.e., one whose normal work schedule is 40 hours or more per week) is ineligible.

Students enrolled during any semester on at least a half time basis (5 graduate or 6 undergraduate credit hours) and whose employment at UC is “incident to and for the purpose of pursuing a course of study” will continue to be eligible for the Medicare and optional OPERS exemptions during that semester and through the subsequent intersession.

Graduate assistants may request exemption from OPERS membership by completing an OPERS Request for Optional Exemption. The form must be completed and submitted to Human Resources within 30 days of the first day of covered employment. OPERS exemption requests will be honored for the duration of a graduate assistant’s service but only during the times that they are registered for classes above the minimum number of hours to qualify for exempt status, and those classes are in session.

Upon termination of their position or graduation, graduate assistants who participated in OPERS can either leave their accumulated contributions on deposit to qualify for future retirement benefits, or request a refund of their accumulated contributions, and will be issued by OPERS.

Refunds from OPERS are subject to federal and state income tax withholding, and reporting by OPERS is a taxable income on IRS Form 1099R. Questions about retirement funds should be directed to Human Resources and/or OPERS.