Insurance

Gov. Inslee signs McCleary school funding bill; School Employees Benefits Board included

Senator Steve Hobbs, Governor Jay Inslee, and PSE President Charlotte Shindler at the McCleary funding solution bill signing in Olympia, WA.

Senator Steve Hobbs, Governor Jay Inslee, and PSE President Charlotte Shindler at the McCleary funding solution bill signing in Olympia, WA.

Today, Governor Jay Inslee signed the historic McCleary school funding bill. Amidst the details of state property tax, increased salary allocations, changes to levy collections, the solution also includes a new insurance system for K-12, the School Employees Benefits Board (SEBB).

Under SEBB, basic education employees who work over 630 hours per school year will receive full state insurance funding. For the thousands of classified school employees drowning in health insurance premiums, SEBB will provide much-needed and long overdue relief. All insurance plans, employee and employer insurance payments will be decided by the SEBB beginning in 2020. Additionally, K-12 insurance funding will equal that of state employees.

“Health insurance is a critical issue for classified school employees,” said PSE President Charlotte Shindler. “With premiums rising dramatically year after year, many of our members spend most of–if not all–their entire paycheck on insurance coverage. For the thousands of classified school employees struggling with health insurance premiums, SEBB will provide affordability, stability, and long overdue relief.”

This victory for our state’s 60,000+ education support professionals wouldn’t have been possible without the advocacy and lobbying efforts of PSE members. Your calls to the legislative hotline, letters sharing your personal health insurance stories, and conversations with your elected representatives were vital to this success. Thank you for stepping up and having your voices heard!

For more information on SEBB and other details of the McCleary solution, click here.

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Show your support for HB 2242 and SEBB

It’s time for affordable health insurance. Call 360-902-4111 and tell Gov. Inslee to sign HB 2242 & School Employees Benefits Board (SEBB) into law.

The legislature’s plan to fully fund education (House Bill 2242) includes a new insurance system for K-12, the School Employees Benefits Board (SEBB). Under SEBB, basic education employees who work over 630 hours per school year will receive full state insurance funding. For the thousands of classified school employees drowning in health insurance premiums, SEBB will provide much-needed and long overdue relief.

Governor Inslee has until Wednesday to sign HB 2242, which includes SEBB, into law.

When signed into law, all insurance plans, employee and employer insurance payments will be decided by the SEBB beginning in 2020. Additionally, K-12 insurance funding will equal that of state employees.

For more information on SEBB, click here.

Support-HB-2242-and-SEBB

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Budget details and McCleary solution updates

Read what it all means for PSE members in Doug’s legislative blog.

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Senator Steve Hobbs – Unsung Hero

Throughout this legislative session, and for the last 5 years, Senator Hobbs has championed classified employee insurance benefits.  Most recently, and during the special sessions, he has asked budget and McCleary solution negotiators to take care of one problem: affordable, quality health insurance for all classified employees.  With the introduction of SEBB (school employee benefit board) in the McCleary solution bill (HB 2242), his patience and determination to help classified employees was finally rewarded.

What you don’t realize is that he has withstood withering attacks that would have scared any normal politician away from the issue.

Congratulations Senator Hobbs and thank you for standing strong for classified school employees!

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Budget details finally published

Just a couple minutes ago, legislative leaders released the budget.  At that site you can click on different displays of the budget documents.  Plenty of good news!

  • PSE’s higher education contracts funded
  • State employee and higher education employee coalition insurance agreement fully funded
  • 2.3% salary increase effective 9-1-17 for K 12 employees (see LEAP 2 for each school districts salary allocation).
  • 17% salary allocation increase to $39,975.50 effective 9-1-19 for K 12 employees.  However, unless you have already agreed to salary increases for 2018-19 on the effective date of HB 2242, your salary increase will be different based upon your school districts average basic education classified employee salary (see LEAP 2).  The salary increase will be the Seattle CPI (current law) or how much would be necessary to raise each school districts average basic education salary calculation up to the amount allocated by the State.
  • Effective 9-1-18, K12 regionalization salary factor for certain school districts goes into effect (see LEAP 3)
  • Insurance funding increased to $820 ($40 increase or 5.1% increase) effective 9-1-17 and $840 (2.4% increase) effective 9-1-18
  • Retiree carveout $64.07 (.5% decrease) effective 9-1-17 and $68.67 (7.2% increase) effective 9-1-18
  • $1.9 million to fund paraeducator board and startup grants
  • $8 million to fund the SEBB (school employee benefit board)

If I find more details in the 617 page budget, I will update in a future blog.

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SEBB! in McCleary solution

Legislative leaders have just released their McCleary school funding solution.  Amidst the many details of state property tax, increased salary allocations, changes to levy collections, the solution includes full implementation of a new insurance system for K 12; a system very similar to the insurance system provided state employees.  A new board, the SEBB (school employees benefit board) will be appointed by the Governor by September 1, 2017.  Starting January 1, 2020, all insurance plans, employee and employer insurance payments will be decided by the SEBB.  As big as that is, the bigger issue is that basic education employees who work 630 hours or more per school year will receive full state funding for insurance.   This has been a crusade by PSE (and me) for the 21 years I have been lobbying for PSE.  To say I am humbled and proud is an understatement!!

An additional sweetener to this insurance issue solution is that K 12 insurance funding will be the same as provided to state employees.  Though I don’t have the final numbers (since they haven’t yet been published), I have been told that the full cost of implementing the half time or more for classified employees and applying the state employee funding amount to K 12 is $460 million.  For classified employees who have been drowning in insurance premium costs or dropping out because they couldn’t afford to cover themselves (9,000 classified employees) or their dependents (39,000), there is a finally a glimmer of hope that someone finally listened to them!

There will be significant changes to how insurance will be negotiated (basically, there won’t be much local negotiation).  A coalition of employee representatives will negotiate with the Governor what the state will fund for insurance benefits.  Then the SEBB will use those funds to determine the insurance plans and premiums that will be paid by the employees and the employer.

Salary Increases

Though there is a significant increase to state funding for our salaries, we will be limited how much we can negotiate starting in the 2018-19 school year.  State funding will increase 37.4% (split equally over the 2018-19 and 2019-20 school years – 18.7% per year).  However, starting in the 2018-19 school year, our salary increase will be limited to the consumer price index (2% is the current estimate) or as much of an increase necessary to raise district average basic education classified employees salaries to $39,975.50.  Complicated but it is what it is.  I looked but couldn’t find what the 2017-18 funded salary increase will be…maybe that will show up in the budget that is expected soon.

Starting in the 2020-21 school year, state funding for salary increases will be based upon the Washington State IPD (implicit price deflator) rather than the Seattle CPI (consumer price index).

Starting in the 2018-19 school year, the legislature will fund a “regionalization factor” to salaries.  This factor will be added to the state allocation and is intended to offset higher cost areas and relieve the pressure on local levies.  The factor shall be based upon the median single-family residential value of each school district and proximate school district median single-family residential value.

Property taxes, levies

There will be an increase to the state property tax to pay a significant part of the roughly $7.3 billion (over the next four years) increase in state funding for K 12.  Local levies will be changing but I will have to spend more time figuring out what the impact will be.

 

As you can tell, these are the parts of McCleary which will have the biggest impact.  There are other areas I will be focusing on in future blogs.

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K 12 insurance – little disagreement but harmful to classified employees

Unfortunately for classified employees, there is very little disagreement over how much the state will provide school districts for classified employee insurance benefits.  Sadly, both the House and Senate provide no increase for insurance funding while Governor Inslee gets credit for the high water mark by coming up with an 8.8% increase (enough to cover one year of premium inflation).  Unless the House and Senate come to an agreement to increase this funding, classified employees will only have received a 1.6% increase over the 10 year period from 2010 – 2019.  Sad…

I have testified that unless the State fully funds premium inflation soon, the only classified employees who will be able to afford insurance are our supervisors.

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No dispute on higher education insurance benefits for next two years

With only a small difference, all three budget proposals fully fund the higher education insurance agreement.  That agreement maintains the 85/15 split of the cost of PEBB insurance premiums.  Employers (either state or higher education institution) funds 85% of the cost of insurance premiums, employees pay 15% of the cost of insurance premiums.  I have to point out that employees pay 15% of the premium costs regardless whether they sign up for employee only coverage or full family coverage.  This is an example of a fair and balanced approach that PSE and many legislators are interested in applying to K 12 insurance premiums.

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1 minute on Senate Budget

With over 100 people wanting to testify, everyone was limited to 1 minute of testimony  (I think I did it in 45 seconds)…
This is what I said:
We like:
  1. Funding paraeducator bill
  2. Pension contributions including the $700 million from rainy day fund
  3. Funding the union coalition health care agreement
  4. Levy equity proposal
  5. State funding for 5,000 locally funded basic education classified employee FTE staff 
  6. State funding for the portion of basic education classified employee salaries that are locally funded
We urge them to consider or reconsider:
  1. Fully funding the PSE higher education contracts
  2. Seattle CPI as future inflation index starting in September 2018
  3. Funding Insurance Inflation with separate index or better yet…move classified employees into PEBB.
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Senate budget appears

It’s only a couple minutes old but as with any Budget there are positives and negatives.  Unfortunately, there appear to be more negatives than positives.

Regarding state employee and higher education contracts, nearly all, except Teamsters correction contract and Washington State Patrol, were not funded.  Instead higher education employees will be provided a $500 per year salary increase effective July 1, 2017, and July 1, 2018.  On the other hand, the union coalition bargaining agreement on health insurance was fully funded.

On the bleaker K 12 side, the Senate budget repeals the Initiative 732 salary increase instead providing a 2.3% salary increase effective September 1, 2017.  Further, insurance funding would not change staying at $780 per month for the 2017-18 school year.

What’s important to realize is that there isn’t funding for a salary or insurance increase the second year of the budget since this is the year when the Senate republican McCleary solution, SB 5607, takes effect (see my previous entry about the bill).  Sorry to get complicated but starting September 1, 2018, school districts would receive increased state funding based upon the National IPD (implicit price deflator).  The IPD usually runs about 1% below the Seattle CPI (consumer price index) – the current measure for our annual salary increases. The way their proposal works is that when this IPD increase goes into effect in September 2018, we will have to negotiate with the school district how much of this increased funding goes for salary or insurance benefit increases starting September 1, 2018.

One positive with their proposal (looking hard for a silver lining), really not this proposal, but their McCleary solution: the state will be funding the additional 5,000 classified employee FTEs that are currently funded by local levies.

And another good point is that the pension plan was fully funded with an additional $246 million set aside to pay for the unfunded liability.

As I spend more time on this proposal, I will update as needed.

Update #1 – Good news…The Senate fully funded PSE’s paraeducator bill, SB 5070 at a cost of $2.3 million!

Update #2 – Good news…they used $700 million from the “rainy day” fund to buy down the PERS 1 unfunded liability.

 

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