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SPONSOR: |
|
DATE TYPED: |
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HB |
276/aHEC |
||
|
SHORT TITLE: |
State Contribution for Group Insurance |
SB |
|
||||
|
|
ANALYST: |
Geisler |
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APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY03 |
FY04 |
FY03 |
FY04 |
|
|
|
|
|
|
38,839.0 |
Recurring |
General
Fund |
|
|
|
|
|
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
Public
Schools Insurance Authority (NMPSIA)
SUMMARY
Synopsis
of HEC Amendment
On page 7, line 10, after “for” insert “other”
as a technical correction.
Synopsis
of Original Bill
This
bill gradually increases the state contribution for group insurance for public
school district and charter school employee to achieve an 80% flat contribution
rate by FY 07. The chart on the next
page illustrates the 5% step increments and the timing, as well as the
percentage of the NMPSIA enrolled population in each salary bracket range. The population statistics are based on data
on file in October 2000.
This
bill also restates the existing contribution rates by salary bracket for other
public entity employees. It restates
that other educational entities (non-districts and non-charter schools) that
participate in the NM Public Schools Insurance Authority remain under the
current contribution structure.
The fiscal estimates are based on NMPSIA’s October 2000
enrollment data with projections for premium increases in the future years.
|
Employee Salary |
NMPSIA Enrollment |
FY 03 State Share |
FY 04 State Share |
FY 05 State Share |
FY 06 State Share |
FY 07 State Share |
|
Under 15K |
24% |
75% |
80% |
80% |
80% |
80% |
|
$15K - $20K |
8% |
70% |
75% |
80% |
80% |
80% |
|
$20K - $25K |
9% |
65% |
70% |
75% |
80% |
80% |
|
$25 & over |
59% |
60% |
65% |
70% |
75% |
80% |
|
|
|
|
|
|
|
|
Significant Issues
Fiscal impact over the next four years – see attached spreadsheet. In summary:
ADMINISTRATIVE IMPLICATIONS
The
step changes each fiscal year will require a comprehensive review at the school
district payroll deduction level each year to ensure the appropriate deductions
occur. The effective date of changing in
July will be problematic, if not impossible, for districts to accommodate due
to the summer payroll checks.
Example: In May, districts cut
checks, including withholdings for insurance through August. A July 1 change in contribution level would
require double work in issuing summer checks.
TECHNICAL ISSUES
A
recommendation is the reference on line 4, page 2 (PDF format) “school
districts” should be changed to read “school districts and charter schools” to
be consistent.
Another
recommendation is the paragraph “B” on line 10, page 7 (PDF format) should say
“for other participating”, to clarify that the other educational
entities (non-districts and non-charter schools) participating in NMPSIA stay
at the current level.
WHAT
WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL?
Participation
in the group insurance plans will not increase, and further healthcare premium
increases will erode more of the school employee’s take home pay.
ATTACHMENT
|
|
NMPSIA
Enrollment |
FY 03
"Current" State Share of Benefit Cost |
FY 04 State
Share of Benefit Cost |
FY 05 State
Share of Benefit Cost |
FY 06 State
Share of Benefit Cost |
FY 07 State
Share of Benefit Cost |
|
Under 15K |
24% |
75% |
80% |
80% |
80% |
80% |
|
$15K - $20K |
8% |
70% |
75% |
80% |
80% |
80% |
|
$20K - $25K |
9% |
65% |
70% |
75% |
80% |
80% |
|
$25 &
over |
59% |
60% |
65% |
70% |
75% |
80% |
|
Annual
Spending Group Insurance |
|
$160,000,000 |
$195,000,000 |
$218,400,000 |
$240,240,000 |
$264,264,000 |
|
Annual
Group Insurance Cost Excluding Higher Education |
|
$144,000,000 |
$175,500,000 |
$196,560,000 |
$216,216,000 |
$237,837,600 |
|
NMPSIA
District Share of Group Insurance Cost |
|
$93,384,000 |
$122,586,750 |
$144,766,440 |
$166,594,428 |
$190,270,080 |
|
Plus APS
(assumed 1/3 of NMPSIA) |
|
$30,816,720 |
$40,453,628 |
$47,772,925 |
$54,976,161 |
$62,789,126 |
|
Total |
|
$124,200,720 |
$163,040,378 |
$192,539,365 |
$221,570,589 |
$253,059,206 |
|
Increase
each year |
|
|
$38,839,658 |
$29,498,988 |
$29,031,224 |
$31,488,617 |
GG//prr