| TO: | Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB2986 by Phillips (Relating to the participation of certain retired employees of juvenile probation departments in the group benefits plan for state employees.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | $0 |
| 2011 | ($764,585) |
| 2012 | ($863,026) |
| 2013 | ($974,140) |
| 2014 | ($1,099,560) |
| Fiscal Year | Probable Savings/(Cost) from General Revenue Fund 1 |
Probable Savings/(Cost) from GR Dedicated Accounts 994 |
Probable Savings/(Cost) from Federal Funds 555 |
Probable Savings/(Cost) from Other Special State Funds 998 |
|---|---|---|---|---|
| 2010 | $0 | $0 | $0 | $0 |
| 2011 | ($764,585) | ($46,679) | ($261,150) | ($6,688) |
| 2012 | ($863,026) | ($52,689) | ($294,773) | ($7,549) |
| 2013 | ($974,140) | ($59,473) | ($332,725) | ($8,521) |
| 2014 | ($1,099,560) | ($67,130) | ($375,564) | ($9,618) |
| Fiscal Year | Probable Savings/(Cost) from State Highway Fund 6 |
|---|---|
| 2010 | $0 |
| 2011 | ($248,345) |
| 2012 | ($280,320) |
| 2013 | ($316,411) |
| 2014 | ($357,149) |
The bill would amend Section 1551.002 of Insurance Code to provide access to Group Benefits Program (GBP) coverage for certain employees of juvenile probation departments (JPDs) retiring on or after September 1, 2009 meeting the following conditions: (1) Employed by a JPD located in a county with a population less than 150,000; (2) Retire on or after September 1, 2009 and have 10 years of creditable service from JPD; (3) Meet all the requirements for retirements from the Texas County and District Retirement System; and (4) The JPD does not provide retired employees access to a health benefit plan, or a plan comparable to the basic plan under the GBP. Additionally, employees not actively employed on August 31, 2009 but who become employed on or after September 1, 2009 must retire from employment on or after September 1, 2019, have at least 10 years of creditable service, and meet the last two requirements listed above.
The bill would take effect September 1, 2009, with coverage effective September 1, 2010.
The bill would increase the cost to the state by increasing the number of retirees for whom the state pays for coverage. It is assumed that the state's cost for the JPD retirees would be the same as the average state contribution for each current GBP member. The Employees Retirement System (ERS) reports that the average state contribution for basic coverage for each member is projected to be $5,444 in fiscal year 2009, and will increase annually in accordance with the HealthSelect plan cost trend. This would result in a cost of $1,327,448 in All Funds ($811,264 in General Revenue-related Funds) in fiscal year 2011, the first year coverage goes into effect.
ERS reports that there were 8,112 JPD employees in Texas in calendar year 2006, according to the Texas Juvenile Probation Commission. It is assumed that the distribution of JPD employees among counties is similar to the distribution of Texas population among counties. Since 26 percent of the Texas population resides in counties with less than 150,000 residents, it is assumed that the bill would apply to 26 percent of JPD employees in Texas, or approximately 2,109 employees. It is further assumed by ERS that 10 percent of these employees will retire on or after September 1, 2009, and enroll in the GBP on September 1, 2010, which is the effective date of the coverage. The number of JPD retirees covered under the GBP is assumed to increase 5 percent each year.
| Source Agencies: | 327 Employees Retirement System
|
| LBB Staff: | JOB, JRO, MS, DEH
|