TO: | Honorable Teel Bivins, Chair, Senate Committee on Finance |
FROM: | John Keel, Director, Legislative Budget Board |
IN RE: | SB1370 by Duncan (Relating to certain group benefit plans provided to certain governmental officers, employees, and retirees and their dependents.), As Introduced |
Estimated savings should be compared to funding levels sufficient to conform to current policies and law. Estimated savings should not be compared to agency "building block" funding requests.
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2004 | $111,056,175 |
2005 | $116,541,536 |
2006 | $122,449,961 |
2007 | $128,740,557 |
2008 | $135,438,267 |
Fiscal Year | Probable Savings/(Cost) fromGENERAL REVENUE FUND 1 |
Probable Savings/(Cost) fromGR DEDICATED ACCOUNTS 994 |
Probable Savings/(Cost) fromFEDERAL FUNDS 555 |
Probable Savings/(Cost) fromOTHER SPECIAL STATE FUNDS 998 |
---|---|---|---|---|
2004 | $111,056,175 | $1,346,648 | $5,849,331 | $104,197 |
2005 | $116,541,536 | $1,346,648 | $5,849,331 | $104,197 |
2006 | $122,449,961 | $1,346,648 | $5,849,331 | $104,197 |
2007 | $128,740,557 | $1,346,648 | $5,849,331 | $104,197 |
2008 | $135,438,267 | $1,346,648 | $5,849,331 | $104,197 |
Fiscal Year | Probable Savings/(Cost) fromOTHER FUNDS 997 |
Probable Revenue Gain/(Loss) fromOTHER FUNDS 997 |
---|---|---|
2004 | $2,950,000 | $53,567,983 |
2005 | $2,950,000 | $56,996,334 |
2006 | $2,950,000 | $60,644,099 |
2007 | $2,950,000 | $64,525,322 |
2008 | $2,950,000 | $68,654,943 |
The bill would cause insurance coverage for active employees of state and higher education institutions under the ERS group insurance program to begin 90 days after the date of employment. In addition, a full-time employee working less than 40 hours a week would have to contribute at least 50 percent of the cost of member-only coverage and at least 75 percent of the cost of dependent coverage. The bill also excludes members of boards and commissions from ERS group insurance coverage.
With respect to insurance coverage for employees of the University of Texas and Texas A&M University systems, the bill would lower the age for covered dependents from the current limit of under 25 years of age to a new limit of under 19 years of age. This would result in fewer higher education employees receiving the additional state contribution for dependent coverage.
The bill would reduce the state contribution rate to the Teacher Retirement System's retired public education employees' group insurance program from 0.50 percent to 0.10 percent. The bill would increase the active public education employees' contribution rate to the retiree insurance program from 0.25 percent to 0.50 percent.
The changes affecting the Employees Retirement System's group insurance program for higher education and general state employees would have the following results. Instituting a 90 day waiting period would result in biennial General Revenue savings of $34.9 million. Reducing the state insurance contribution for employees that work less than 40 hours per week would result in biennial General Revenue savings of $10.8 million. Excluding board and commission members from receiving state insurance contributions would result in biennial General Revenue savings of $3.1 million.
The reduction in the dependent age eligibility limit from 25 to 19 for insurance coverage, affecting employees of the University of Texas and Texas A&M system, would result in annual General Revenue savings of $1.8 million.
Reducing the TRS retiree insurance state contribution would result general revenue savings of $176.9 million for the 2004-2005 biennium. Increasing the active public education employees' contribution to 0.50 percent from 0.25 percent would generate $110.6 million to the Teacher Retirement System' trust fund, shown as "Other Funds" above, for the retired public education employees' insurance program.
Source Agencies: | 304 Comptroller of Public Accounts, 323 Teacher Retirement System, 327 Employees Retirement System
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LBB Staff: | JK, JO, SD, UP, RN
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