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Guilderland Central School District
Fringe Benefits &
Health Insurance
Citizens’ Budget Advisory Committee
March 2010
1
Fringe Benefits
Category
2009-10
Budget
2010-11
Budget
Increase/
Decrease
ERS
$772,000
$1,361,800
$589,800
TRS
$2,584,000
$3,145,000
$561,000
Social Security
$3,599,131
$3,520,414
($78,717)
$250,000
$250,000
-0-
Life Insurance
$93,500
$93,700
$200
Unemployment
$40,000
$70,000
$30,000
$9,687,000 $10,042,000
$355,000
Workers’ Comp.
Health Insurance
Total
$17,025,631 $18,482,914 $1,457,283
2
Employer Retirement Contributions
„
Contribution rates and benefits are determined by
the retirement systems, not negotiated by school
districts
„
Employer contributions are mandatory
„
Yearly rate fluctuations reflect the stock market
„
Stock market losses significantly raised rates for
2010-11 and large increases are likely for
successive years
3
Employer Retirement Contributions
2009 Pension Fund Performance
„
„
TRS loss of $23.3 billion (-20.5%)
„
5-Year Smoothing of Contribution Rate
„
Rate Increase from 6.2% to 8.6% (+2.4%)
„
1% Rate Increase for GCSD = $365,000
ERS loss of $44 billion (-26%)
„
Rate Increase from 7.2% to 11.6% (+4.4%)
„
1% Rate increase for GCSD = $105,000
„
Minimum Contribution Rate of 4.5%
„
Budget for 2010-11 (75%) and 2011-12 (25%)
4
NYS Pension System Reform
New Tier 5 Benefits
Minimum
Retirement Age
Employee
Contribution
Maximum Benefit
Years of Service
Minimum Years
For Vesting
Overtime Cap for
Pension Benefits
Prior
TRS
ERS
55
57
62
3% for
ten yrs
3.5%
career
3%
career
20
25
5
10
None
$15,000
5
Health Insurance Benefit Eligibility
„
„
Medical, dental and drug coverage
available to all eligible employees
Active employees:
„
„
„
Hourly employees working minimum of twenty
hours per week
Salaried employees at .5 FTE or greater
Retirees
„
„
Minimum of 10 years of district service
Minimum number of accumulated sick days
6
Plan Offerings and Cost Sharing
„
Four plans available:
Blue Shield Preferred Provider Organization (PPO)*
„ Blue Shield Health Plus POS
„ Capital District Physicians Health Plan (CDPHP)
„ MVP
„
„
Cost sharing of premiums
Employer pays 80%; Employee pays 20%
„ GCSD ratio established during the early 1970’s
„ Employees/Retirees contribute in excess of
$2 million annually toward premiums
„
* Note: BS PPO only plan with nationwide coverage.
7
2009-10 Plan Enrollment Distribution
Active
Members
419
254
110
39
Plan
CDPHP
BS PPO
BS POS
MVP
Medicare Advantage
Total
822
Retirees
36
198
16
5
Total (%)
455 (39%)
452 (39%)
126 (11%)
44 (4%)
77
77 (7%)
332
1,154 (100%)
Note: 75.3% of all active eligible employees participate.
8
Plan Enrollment Distribution
Single
Two
Person
Family
Medicare
CDPHP
158
108
180
9
Blue Shield PPO
147
82
87
136
Blue Shield POS
46
30
41
9
MVP
16
6
20
2
Plan
CDPHP Medicare Choice
15
Blue Shield Medicare Advantage
62
Total
367
(32%)
226
(20%)
328
(28%)
233
(20%)
9
2009-10 Premium Rates
including Dental and Rx
Premiums
Single
80%
20%
Family
80%
20%
BS PPO
$6,796
$5,437
$1,359
BS POS
$5,452
$4,362
$1,090
CDPHP
$5,669
$4,535
$1,134
MVP
$5,861
$4,689
$1,172
$18,472 $15,941 $15,280 $15,786
$14,778 $12,753 $12,224 $12,629
$3,694 $3,188 $3,056 $3,157
10
2009-10 Medicare Premium Rates
including Dental and Rx
Blue Shield
Medicare
Group Plan
Medicare
Advantage
Savings
Premium
District
(80%)
Employee
(20%)
$5,765
$4,612
$1,153
$3,685
$2,948
$737
$2,080
$1,664
$416
Note: Must establish a permanent residence in NYS to enroll in
the Blue Shield Medicare Advantage program.
11
Suburban Council Employer
Contribution Rate Comparison
GCSD
District
Individual
Family
A
89%
89%
B
90%
90%
C
89%
89%
D
85%
85%
E
89%
87%
F
85%
85%
Individual:
90%
G
90%
80%
Dependent:
75%
H
85%
85%
Family (est.): 80%
I
90%
80%
J
81%
81%
K
90%
80%
L
90%
80%
M
80%
80%
Average
87%
84%
NYS Employees
12
Health Insurance Trend
Trend is a forecast of per person claims
cost that takes into account various
factors, such as price inflation,
utilization, government-mandated
benefits, and new treatments,
therapies, and technologies.
13
2010 Segal Health Plan
Cost Trend Survey
Components of 2010 Projected Trends
Trend
Component
Hospitals
Physicians’
RX
Price Inflation
8.3%
3.7%
6.4%
Utilization
2.9%
4.6%
2.4%
Other
0.3%
0.1%
0.3%
Total Trend
11.5%
8.4%
9.1%
2009 Total Trend
10.9%
8.9%
9.8%
14
Managing Trend
„
„
Education: become consumers of health
care not users of health care
Managed Care
„
„
Referrals (HMO)
In-Network vs Out-of-Network Services (BS)
„
Generic Drugs
„
Wellness and Prevention
15
District Health Insurance Committee
„
„
„
„
„
Model in existence for 35+ years
Changes to plan benefit structure occur outside
of collective bargaining process
Collaborative approach to providing a health
care benefit for employees
Recommends and approves changes that impact
all employees, not just one bargaining unit
Control health care costs for district and
employees (cost sharing)
16
Guilderland Benefit Changes
„
„
„
„
„
„
„
„
ƒ
ƒ
1997
1998
2000
2002
2004
2005
Introduced Point-of-Service Plan
Self-fund Prescription Drugs (BS)
Self-fund Prescription Drugs (HMO)
Two-Tier Drug Plan
Three-Tier Drug Plan; $20 Office Visit Co-pay (HM0’s)
Replace Indemnity Plan with PPO Plan;
$20 Office Visit Co-pay (BS POS)
2006 CDPHP - $25 office visit co-pay;
CanaRx Prescription Drug Plan
2007 Eliminate 100 Pill/One Retail Pharmacy Co-pay;
Implement Step Therapy; Offer Medicare Advantage
Plan Option (HMO)
2008 Offer Medicare Choice Plan Option (BS)
2009 MVP - $25 office visit co-pay; $240 in-patient hospital co-pay;
$75 outpatient surgery co-pay
ESI - Zero Dollar Co-pay Incentive Program
17
Guilderland Health Care Costs
Managing Trend
Year
%
Segal
Total
Expenditures Increase Increase Trend
2004-05
$7,121,135
2005-06
$7,372,580
$251,445
3.5%
12.2%
2006-07
$7,687,323
$314,743
4.3%
12.0%
2007-08
$7,977,781
$290,458
3.8%
11.4%
2008-09
$8,765,655
$787,874
9.9%
10.9%
$411,130
5.4%
11.6%
Average
18
Managing Trend vs.
Increased Contributions
$13,000,000
$12,000,000
$11,000,000
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
09-
08-
07-
06-
05-
04-
10
09
08
07
06
05
70% Contribution Rate
20
20
20
20
20
20
GCSD Expense
Trend
19
2006 Consultant Study
„
Recommendations
9
9
9
9
Increase mail order utilization
Explore step therapy
Continue to review potential alternatives
for providing health coverage
Conduct a risk analysis of population
20
Summary
„
„
„
„
Plan design changes have been implemented to
control costs and manage trend
Health benefits offered to employees are
comparable to other districts
Highest employee contribution rate for health
insurance out of the 13 schools in the suburban
council and higher than NYS employees
Rising health care costs are a national problem
requiring legislative efforts needed to curb
health costs and provide options to employers
21