State Health Plan for Employees and Retirees Reform | Eastern North Carolina Now

    Conclusion

    For too long, state government has promised more health care benefits to employees and retirees than it can deliver. By acting now to create a health plan for the real-world, however, North Carolina can avert a fiscal disaster while treating workers fairly.

    Asking state workers and retirees to merely chip in a minimal amount towards their premiums can secure the long-term viability of their health care benefits, while still leaving intact a benefit package more generous than other state governments and large private sector employers. The addition of a high-deductible plan accompanied by a health savings account as an option can likewise save the state millions while offering state workers additional options that may be right for their situation.

    Elected officials in North Carolina owe it to its citizens and to state workers and retirees to implement sensible reforms to ensure fair coverage that doesn't punish hardworking taxpayers. To kick the can further down the road would be irresponsible.

    [1] North Carolina State Health Plan website: http://www.shpnc.org/

    [2] North Carolina Session Laws 2011-85, and 2011-96. Available online at: http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2011&BillID=hb+578&submitButton=Go, and http://www.ncleg.net/gascripts/BillLookUp/BillLookUp.pl?Session=2011&BillID=sb+323&submitButton=Go

    [3] "Long-term Liabilities for Retired Employee Health Benefits," prepared by the Fiscal Research Division of the North Carolina General Assembly for the House Select Committee on Legacy Costs from the State Health Plan, Pensions and ESC. December 13, 2011. Available online at: http://www.nccivitas.org/wp-content/uploads/2012/07/benefits.pdf

    [4] Legislative Actuarial Note for HB 1085. Available online at: http://www.ncleg.net/Sessions/2011/FiscalNotes/House/PDF/HAH1085v1.pdf

    [5] Ibid.

    [6] Estimate of employer contributions for active employee SHP premiums for General Fund-supported positions obtained from email correspondence with Fiscal Research. General Fund appropriation to the Retiree Health Benefit Fund to cover retiree SHP premiums calculated using contribution rate contained in FY 2012-13 budget bill times the covered payroll total for General Fund employees obtained in email correspondence with state Treasurer's office.

    [7] Actuarial Note for HB 1085, Supra.

    [8] "Updated Financial Projection, 2009-2011 Biennium January 2010" Presentation to Board of Trustees. February 17, 2010. Page 6. Available online at: http://www.shpnc.org/library/pdf/board-materials/February-2010/updated-projection-current-biennium.pdf

    [9] S.L. 2011-96 and S.L. 2011-85, Ibid.

    [10] Fiscal Research Legislative Actuarial Note for HB 578. Available online at: http://www.ncleg.net/Sessions/2011/FiscalNotes/House/PDF/HAH0578v4.pdf

    [11] "Long-term liabilities," Ibid.

    [12] "Recognition of Long-term Liabilities Under New Government Accounting Standards for Other Post-Employment Benefits," Fiscal Brief, Fiscal Research Division. March 23, 2007. Available online at: http://www.ncleg.net/fiscalresearch/frd_reports/FRD_Reports_PDFs/Fiscal_Briefs/fiscal_brief_gasb_opeb032607.pdf

    [13] "Long-term liabilities," Ibid.

    [14] Calculated using contribution rate contained in FY 2012-13 budget bill times the covered payroll for General Fund employees obtained in email correspondence with Fiscal Research Division.

    [15] Calculated using General fund covered payroll estimates for previous years from state Treasurer's office obtained via email times the contribution rate included in the FY 2000-01 state budget bill.

    [16] 2010 numbers taken from legislative actuarial note for SB 323, and 2005 figure from legislative actuarial note for SB 837. Available respectively online at: http://www.ncleg.net/Sessions/2011/FiscalNotes/Senate/PDF/SAH0323v5.pdf
http://www.ncleg.net/Sessions/2005/FiscalNotes/Senate/PDF/SAH0837v2.pdf

    [17] U.S. Census Bureau, 2010 Annual Survey of Public Employment and Payroll. Available online at: http://www2.census.gov/govs/apes/10stne.txt

    [18] S.L. 2006-174. Available online at: http://www.ncleg.net/Sessions/2005/Bills/Senate/PDF/S837v5.pdf

    [19] Legislative actuarial note for SB 837. Available online at: http://www.ncleg.net/Sessions/2005/FiscalNotes/Senate/PDF/SAH0837v2.pdf

    [20] "Long-term liabilities," Ibid.

    [21] Bureau of Labor Statistics, National Compensation Survey. March 2012. Table 3. Available online at: http://www.bls.gov/news.release/ebs2.t03.htm

    [22] Ibid.

    [23] "Long-term liabilities," Ibid.

    [24] Ibid.

    [25] Ibid.

    [26] "Retiree Health Plans: A National Assessment," Center for State & Local Government Excellence. Sept. 2008. Available online at: http://www.nasra.org/resources/medical/SLGE.pdf

    [27] Ibid.

    [28] Enrollment figures taken from fiscal actuarial note for HB 1085

    [29] "Retiree Health Plans," Ibid.

    [30] Fiscal actuarial note for HB 1085

[31] Legislative actuarial note for SB 323, available online at: http://www.ncleg.net/Sessions/2011/FiscalNotes/Senate/PDF/SAH0323v5.pdf

[32] "Companies going to high deductible insurance plans", USA Today. Nov. 22, 2011. Available online at: http://www.usatoday.com/money/industries/health/story/2011-11-22/high-deductible-health-plans/51356092/1

[33] "Hoosiers and Health Savings Accounts", Gov. Mitch Daniels, Wall Street Journal. March 1, 2010.

[34] Ibid.

[35] Ibid.

[36] Ibid.

[37] Ibid.

[38] Based on total state contributions for General-Fund supported employee SHP premiums of $1.25 billion estimated for FY 2012-13 in email correspondence with Fiscal Research.