Board Update March 14, Employee Insurance Benefits

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Tyrone Campbell
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1 Board Update March 14, 2017 Employee Insurance Benefits 1

2 Employee Insurance Benefits Total number of employees eligible for District contribution toward TRS-ActiveCare Premiums: 6,880 Of these, how many employees enrolled in a TRS-ActiveCare plan: 4,592 (66.74% of employees eligible for District contribution) As of February 21,

3 Employee Insurance Benefits Employee Monthly Cost After District Contribution Employee Only ActiveCare 1 HD $82 $82 ActiveCare Select $214 $225 ActiveCare 2 $355 $386 Scott & White HMO $ $ rates to be determined by TRS in June

4 TRS-ActiveCare Medical Plan Premiums ActiveCare 1-HD Current # Enrolled Total Cost District Contribution Employee's Cost Total Cost District Contribution Employee's Cost Employee Only 2,233 $ $ $82.00 Employee + Spouse 95 $ $ $ Employee + Child(ren) 490 $ $ $ Employee + Family 93 $1, $ $ Child Only 1 $ $ ActiveCare Select Employee Only 273 $ $ $ Employee + Spouse 19 $1, $ $ Employee + Child(ren) 112 $ $ $ Employee + Family 26 $1, $ $1, ActiveCare 2 Employee Only 670 $ $ $ Employee + Spouse 47 $1, $ $1, Employee + Child(ren) 215 $1, $ $ Employee + Family 227 $1, $ $1, Premiums to be determined To be determined by TRS Board of Trustees by TRS Board in June of Trustees in June Scott & White HMO Employee Only 52 $ $ $ Employee + Spouse 2 $1, $ $ Employee + Child(ren) 27 $ $ $ Employee + Family 24 $1, $ $1, Includes the 4,592 full-time employees plus 13 substitutes and part-time employees, and 1 child-only enrollee. No District contributions made for substitutes, part-time employees, or child-only enrollees. 4

5 Employee Insurance Benefits State requires monthly contribution of $225 Current District monthly contribution: $259 4,592 employees enrolled = $14,271,936 annual 5

6 Employee Insurance Benefits For a $10 change in monthly District contributions, there is a $551,040 annual budget impact. 6

7 Contributions Made by Area Districts School District District Contributions Prosper ISD Rockwall ISD Irving ISD 341 Allen ISD 340 Frisco ISD 325 Garland ISD 325 Lewisville ISD Coppell ISD 311 McKinney ISD 306 Dallas ISD 303 Grapevine-Colleyville ISD 285 Richardson ISD Keller ISD 275 Wylie ISD 275 Mesquite ISD Carrollton-Farmers Branch ISD 262 Birdville ISD 260 Denton ISD 260 Plano ISD 259 Arlington ISD 235 prof, 250 para Chart shows contributions made in , and indicates if it was an increase from previous year. Contribution amounts for are not yet known. 7

8 Employee Insurance Benefits Senate Bill 789 has been filed to exclude school districts with 1,000+ employees from participation in TRS-ActiveCare, starting with the plan year. District staff is already preparing next steps, collecting benchmarking data, and reviewing options for obtaining coverage. 8

9 Other Benefits/Compensation $500 One-Time Lump Sum Payment 6,002 eligible employees Total cost to District $2,989,850 Payment based on FTE % Paid to employees in December 2016 Eligibility Criteria Employed last contract/work day of and earned one year of TRS credible service Still employed as of November 30, 2016 (Substitute and temporary workers were not eligible) 9

10 Affordable Care Act Employer shared responsibility (pay-or-play) Employers must offer affordable coverage to full-time employees, or be subject to a penalty ($270/month in 2016, $282.50/month in 2017) Based on current premiums/district contribution, PISD complies for employees. Substitutes are the main source of potential penalty. Month Estimated # of full-time substitutes offered unaffordable coverage January 111 A penalty would only be assessed if the February 197 worker obtained coverage through HealthCare.gov and received a subsidy for March 88 that coverage. April 218 May 197 June 10 July 13 August 16 September 133 October 135 November 58 December 0 Therefore, it is highly unlikely that a penalty can be assessed on each of these workers. Also excluded from penalty would be: Retirees on TRS-Care Medicare/Medicaid eligible Covered by another employer plan If penalty is assessed on ¼ of these workers, the estimated exposure could be $83,

11 Affordable Care Act Future consideration: As premiums continue to increase and the District s contribution remains the same, coverage may eventually be considered unaffordable to some of our lowest-paid employees. (Possible penalty exposure if premium is greater than 9.69% of gross household income.) Exposure can be minimized either by increasing the District contribution or by increasing the lowest rate of pay. Sample calculation: $10/hour x 130 hours/month = $1,300 x 9.69% = $

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