Legislative

NCRSP LEGISLATIVE GOALS

2009-2010

The following legislative goals have been adopted as essential to the improvement of the welfare & security of retired school personnel:

· Full funding for the State Health Plan, with no decrease in benefits.

· An increase in the State contribution rate to the Teachers’ & State Employees’ Retirement System (TSERS) to at least 4.8%, the rate for the Local Governmental Employees’ Retirement System. (6% is needed to keep system actuarially sound in the long term).

· A Cost of Living Adjustment (COLA) at least equal to the average salary increase granted to active employees, but no lower than the rate of inflation.

· A multi-year increase in the accrual formula from 1.82% to 1.85%, to achieve parity with local government retirees.

· Support continuation of defined benefit pension programs for school personnel and state employees, and oppose any trend toward defined contribution programs.

· Support raising teachers’ salaries beyond the national average.

Note: Earnings (gains) in the Retirement Trust Fund for Teachers and State Employees are sufficient to pay a COLA of only 1.25% in 2008. A larger COLA would require an additional appropriation, as would an increase in the formula from 1.82% to 1.83%. For example, a 4% COLA would cost $114 million (1% from gains and 3% from appropriations), and the formula increase would require an appropriation of $47 million. These two items combined would require an increase in the State contribution rate of 1.4%, from 2.66% to 4.06%.

State Health Plan

The PPO is the health plan available for state employees and retirees.

Following is a summary of the rate increases and benefit changes:

· The rate increase for the 2008/2009 benefit year is in line with national trends. The premiums that members pay for their dependent coverage will increase by 11.2% for the PPO plans. This rate increase applies across all coverage tiers and will be effective October 1, 2007. With one increase for the biennium for the PPO, the average annual increase is approximately 5.6%.

· Based on member feedback, the State Health Plan has expanded certain benefits for the PPO plans, effective July 1, 2007. This includes enhancements to physical, occupational and speech therapies, and mental health and chemical dependency. Chiropractic benefits have also been modified and offered at a specialist copay.

· Due to the rising cost of health care, costs for the Indemnity plan deductible and copay have increased. The Indemnity plan copay for office visits increased from $15 to $25. The individual deductible increased from $350 to $450 per benefit year, and the family deductible increased from $1050 to $1350 per benefit year. These benefit changes are effective retroactive to July 1, 2007.

· The prescription drug plan will remain the same, except that the preferred brand with no generic equivalent tier will increase by $5, from $25 to $30 for all plans, effective August 6, 2007.

For more information about rates and benefits, please visit the State Health Plan Web site at www.shpnc.org.

You can also click on Trifold.pdf to see a brief outline of the three Preferred Provider Plans.

PPO plan members, please call 1-888-234-2416 for questions related to health benefits. Members with pharmacy questions may call 1-800-336-5933.

Other legislation enacted by the 2006 session of the General Assembly requires employees hired after October 1, 2006 to work 20 years for the State before earning free health care upon retirement. Current State employees will not be affected, only those hired after October 1, 2006. If a current employee has a day of service prior to October 1, he or she will still receive free health care upon retirement after five consecutive years of State service.

Should an employee have 10 years of service, but less than 20, the employee would be responsible for one-half of their premium upon retirement. The State would pay the other half. According to health care officials, this change in the law will help manage the State’s estimated $13.5 billion unfunded health care liability for current and future retirees, as well as help prepare for future expenses to the health care system due to large numbers of retirements, without raising health care premiums.

Legislative Committee

Bob Severs, Chairman
Lucy Ellen Gwyn	Shirley Stockton
Vicky Rogers	Keever Clark
Pam Deardorff, Lobbyist	Dr. Lacy Presnell, Jr. Lobbyist

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