The Nexus Group: Retirement & Benefits for Feb. 27

Feb 27, 2015

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Posted by Jerry Bender


The Nexus Group: Retirement & Benefits for Feb. 27

February 27 is the deadline for all bills from fiscal committees to have passed out of committee. Attention then focuses on floor action. All bills will have until March 10 to clear their chamber of origin.

One issue of major concern to school districts has been the lack of substitute teachers. There are three proposals that have received attention and are meant to help address that shortage. Each proposal has differences.

HB 1737 Addressing the availability of retired teachers as substitutes.

The original bill stated that a teacher in Plan 2 or Plan 3 that has retired under the ERF factors may be employed with an employer for up to two hundred sixteen hours per school year (27 days) without suspension of his/her benefits.

The bill was scheduled for Executive Session action at the February 25 House Appropriations Committee meeting. Representative Sam Hunt proposed an amendment that made two basic changes from the original bill:

  1. Districts must document a shortage of certificated substitute teachers, and
  2. The number of hours a retired teacher may work without suspension of retirement benefits was increased from 216 hours to 630 hours. (The intent was to basically allow up to a semester of substitute availability, but this would vary depending on the length of an individual school day.) The bill as amended was adopted by a 30 to 3 vote.

This bill represents a strong step in a desired direction and keeps the issue of increasing the pool of qualified substitutes alive.

SB 5148 Allowing members who retire early under alternate early retirement provisions as set forth in RCW 41.32.765(3) and 41.32.875(3) to work as substitute teachers and continue receiving retirement benefits at the same time.

This bill directly addressed the need for substitutes and had no limit as to hours. The bill was scheduled for Executive Session action by the same committee on February 23, but upon returning from caucus the bill did not come before the committee for a vote. There is strong opposition by Senators Bailey and Schoesler to this bill, and the chair of the committee chose to not bring the bill before the committee even though its two prime sponsors were Republican Senators Parlette and Dammeier. At this point, the bill is presumed dead.

SB 5941 Concerning certification of adjunct faculty as common school substitute teachers.

This bill requires the Professional Educator Standards Board to amend or adopt rules that provide for issuance of the certification necessary to serve as substitute teachers, other than emergency substitute certification, to adjunct faculty currently employed in institutions of higher education who meet certain criteria.

The bill was voted out of the Early Leaning and K–12 Senate Education Committee by a vote of 9 to 0. It has been sent to Rules for Second Reading. Another bill of note and potential impact to school districts is SB 5976.

SSB 5976 Establishing a consolidating purchasing system for public school employees.

Sponsors: Senators Litzow, Keiser, Becker, Rivers, Hobbs, Hill, Hatfield, Fain, Baumgartner, McAuliffe, Dammeier

This bill creates the School Employees’ Benefits Board (SEBB), within the state health care authority (HCA), to design and approve state-wide insurance benefit plans for school employees and to establish eligibility criteria for participation in insurance benefit plans. It would remove health benefits from collective bargaining at a district level and put the responsibility for statewide collective bargaining with the Governor or his designee.

This bill is virtually the same as SB 6442/HB 2724 which was introduced in the 2012 legislative session and received no floor action in the Senate, and no hearings in the House.

The stated intent of the bill to create savings through assumed efficiencies to assure equitable access to health care for all eligible employees and their dependents and to assure assumed cost-effectiveness through pooling, leveraged purchasing, and administrative simplification. One of the chief savings would come from an elimination of the broker and administrative fees currently paid in the private plans in place.

This bill was heard on February 24 before the Senate Ways and Means Committee. It was felt that removing the bargaining of health benefits from districts would help alleviate the burden on districts of doing so. However, this bill as proposed is premature. It presupposes that a statewide menu of insurance choices with a K–12 risk pool would be less expensive that what is currently available. No one knows. Furthermore, after its implementation, costs to administer the plan statewide would be added to then established premiums, an unknown effect on such costs.

In 2012, the legislature passed ESSB 5940 which among other things directed the HCA to do a study of the advantages and disadvantages of a consolidated health purchasing plan. They are to deliver their report on June 30, 2015. They are looking at various models. One is the effect of establishing a K–12 risk pool and its effect on rates. Another is to move the K–12 employees into the already existing Public Employment Benefit Board (PEBB) system. No one yet knows the pluses or minuses of such a change. Hence the earlier mandate to perform study. This proposed bill ignores that and moves ahead at a cost of $14+ million dollars just to staff the HCA in order to set up the SEBB and begin to gather information and then insurance quotes. All K–12 employees would be in this SEBB model by January 1, 2017. As an aside, this bill only speaks to Health and Dental insurance offerings. Vision, VEBA, long-term care, and life insurance offerings are left out at this point.

The bill was amended and voted out during Executive Session by the Ways and Means Committee on February 26.

Feel free to contact me if you have any questions.

Fred Yancey
The Nexus Group

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  • Retirement

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