Exemption from OPERS/Medicare for Student Employees

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 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 final regulations issued on December 20, 2004 and effective April 1, 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.