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SB10 requires new employee health-insurance contributions for many CERS members starting July 1, 2026
Summary
KPPA said Senate Bill 10 mandates CERS employees in the dollar-contribution plan begin pre-funding insurance funds: nonhazardous employees pay 1% of Creditable Compensation and hazardous employees pay 2% beginning July 1, 2026; Tier 2/3 hazardous increases from 1% to 2%.
Kentucky Public Pensions Authority staff explained the pre-funding provision of Senate Bill 10, saying it requires members of the CERS dollar-contribution plan who are not already paying into the Health Insurance Fund to begin doing so. The presenter clarified this change does not affect KERS or SPRS employees or any employees on percentage-based insurance groups.
The presenter said, "Effective 7/1/2026, CERS Nonhazardous employees will pay 1% of their Creditable Compensation into the Health Insurance Fund, and Hazardous employees will pay 2% of their Creditable Compensation into the Health Insurance Fund." They also noted Tier 2 and Tier 3 hazardous employees will increase from the current 1% to 2%. KPPA described the Health Insurance Contribution as a non-refundable, pre-tax contribution paid in addition to the regular 5% (nonhazardous) or 8% (hazardous) pension contribution.
