Fred Yancey, a retired principal and superintendent, represents AWSP on health care and retirement issues. Check out his summer conference update with the latest from the School Employee Benefit Board (SEBB), the Public Employee Benefit Board (PEBB), and pensions. Fred can be reached at email@example.com if you have questions. Read his update below.
SEBB: School Employee Benefit Board
- K–12 health benefits will be consolidated into a statewide insurance pool administered by the Health Care Authority HCA; Effective January 1, 2020.
- At a minimum, any employee who works or is anticipated to work 630 hours more a year is entitled to benefits. Recent legislation also allowed districts, at their option, to offer benefits to those working less than 630 hours.
- Future health benefits will be collectively bargained between a coalition of education groups and representatives from the Governor’s Office. Bargaining is to begin after 1, July 2018 “to determine the dollar amount to be contributed on behalf of each employee”.
- Officials from HCA and the Office of Financial Management (OFM) are currently holding hearings seeking input from the education field on this conversion and specifically how to establish the bargaining coalitions and other issues of concern.
- It appears that the ‘management’ side of the bargaining table will solely consist of representatives from OFM.
- One KEY question concerns the funding of benefits. Will these benefits, once negotiated, be state funded on a per-FTE/state formula allocation basis? Or on head-count basis? No one knows. Districts should rightly be concerned over this issue as these potential added costs could be substantial. (Estimated statewide to be about $200-$300 million dollars.)
- The SEB Board is holding frequent and lengthy meetings to meet the deadline for full implementation.
- More detail on adopted policies, suggested models, provider interest and other issues is available on the SEBB website https://www.hca.wa.gov/about-hca/school-employees-benefits-board-sebb-program
- Regular updates and reports from Nexus are sent to AWSP, WASA and WASBO at the end of each meeting.
PEBB: Public Employee Benefit Board
- Because PEBB already administers a statewide health care insurance program, its model is the one that the SEBB is using as it creates its ‘own’ design.
- Both SEBB and PEBB are changing their prescription drug coverage provisions to compel use of generic/cheaper alternative drugs.
As a head’s up, the Office of the State Actuary will be submitting an early report on longevity. It is likely that it will show that retirees continue to live longer. With longer lives, and a lower, assumed investment return (7.5% from earlier 7.8%), the new result is going to be an increase in pension rates paid by employers and some employees.