Fiscal impact
reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for
standing finance committees of the NM Legislature. The LFC does not assume
responsibility for the accuracy of these reports if they are used for other
purposes.
Current FIRs (in
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whereas HTML versions may not.
Previously issued FIRs and attachments may also be obtained from the LFC
in
|
SPONSOR |
Romero |
DATE TYPED |
|
HB |
|
||
|
SHORT
TITLE |
State Employee Group Insurance Contributions |
SB |
334 |
||||
|
|
ANALYST |
Geisler |
|||||
APPROPRIATION
|
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
|
FY04 |
FY05 |
FY04 |
FY05 |
||
|
|
|
|
Significant |
Recurring |
All
Funds |
|
|
|
|
|
|
|
(Parenthesis
( ) Indicate Expenditure Decreases)
Relates to:
HB 283, SB 305, SB 373
General
Services Department
LFC Files
Public Schools Insurance Authority
SUMMARY
Synopsis of Bill
This
bill changes the salary brackets and state contribution percentages towards
group insurance for state, public schools, and higher education employees in FY
05 and FY 06. There is no appropriation
contained in the bill.
|
Current: |
State Pays |
Employee Pays |
|
Annual
Salary less than $15,000 |
75% |
25% |
|
$15,000
but less than $20,000 |
70% |
30% |
|
$20,000
but less than $25,000 |
65% |
35% |
|
$25,000
and over |
60% |
40% |
|
Proposed
in FY05: |
State Pays |
Employee Pays |
|
Annual
Salary less than $30,000 |
80% |
20% |
|
$30,000
but less than $40,000 |
70% |
30% |
|
$40,000 and over |
60% |
40% |
|
Proposed
in FY06: |
State Pays |
Employee Pays |
|
Annual
Salary less than $50,000 |
80% |
20% |
|
$50,000
but less than $60,000 |
70% |
30% |
|
$60,000
or more |
60% |
40% |
Significant Issues
This
bill appears to make changes in the state group insurance contribution rates to
bring them into accord with the American Federation of State, County and
Municipal Employees (AFSCME) collective bargaining agreement that was recently
negotiated with the state. This would be the first change in the
contribution brackets in several years.
Salary increases over the years means that the majority of state
employees, teachers, and higher education employees receive only a 60% share
from the state for the cost of insurance.
FISCAL IMPLICATIONS
Costs
increase under SB 334 compared to the current brackets as the employer contribution
will increase for all employees that make under $40 thousand in FY 05 and $60 thousand
in FY 06. Right now the majority of
employees make over $25 thousand and are limited to a 60% contribution from the
employer. A number of cabinet agencies
are concerned that the increased cost to agencies of changing the employer
share has not been budgeted.
PSIA
notes that average savings to an employee making $21 thousand who purchases
Blue Cross Blue Shield family coverage would be $1,600 under the new benefit
brackets in FY 05.
|
FY 05 FISCAL IMPACT OF SB 334 (000's) |
|||
|
|
General Fund |
Other Funds |
Total |
|
State Employees |
6,943.1 |
5,237.7
|
12,180.8 |
|
Public Schools |
21,207.2 |
1,116.2 |
22,323.4 |
|
Higher Education |
1,215.4 |
2,257.2 |
3,472.6 |
|
Total |
29,365.7 |
8,611.1 |
37,976.8
|
|
FY 06 FISCAL IMPACT OF SB 334 (000's) |
|||
|
|
General Fund |
Other Funds |
Total |
|
State Employees |
11,086.1 |
8,363.1 |
19,449.2
|
|
Public Schools |
19,186.2 |
1,009.8 |
20,196.0
|
|
Higher Education |
1,263.4
|
2,346.3 |
3,609.7
|
|
Total |
31,535.7
|
11,719.2 |
43,254.9 |
Per GSD, the above
numbers for state employees include a 25% “migration” cost factor for additional
state employees that may join the program due to the increased employer share
of the premium. Alternatively, as the
above numbers for state employees do not factor in medical inflation, the 25%
factor could address medical cost inflation.
The cost estimates for public
schools and higher education do not include a migration factor.
ADMINISTRATIVE IMPLICATIONS
Section 2 of the bill
provides that any salary adjustment in January 2005 shall not reduce the state
contribution even if the salary adjustment of an employee places the employee
in a higher salary bracket; provided that the state contribution may be lowered
for salary adjustment on or after January 2006.
CONFLICT
Conflicts
with SB 305 and HB 283, which set different contribution rates. SB 373 provides for implementation of the
health care brackets as proposed by the AFSCME agreement for state employees
only.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL?
Public employees would
continue to see their take home pay reduced by increasing insurance premiums.
AMENDMENTS
The effective date is
GGG/yr:njw