News Release // TSEA: State employees’ compensation package earned, not a subsidy.

TSEA February 24, 2015 Comments Off on News Release // TSEA: State employees’ compensation package earned, not a subsidy.
News Release // TSEA: State employees’ compensation package earned, not a subsidy.

February 23, 2015
Contact: Chris Dauphin
Phone: (615) 256-4533, 800-251-8732
[email protected]

TSEA: State employees’ compensation package earned, not a subsidy.

Sub·si·dy – defined by Merriam Webster as follows:
A grant by a government to a private person or company to assist an enterprise deemed advantageous to the public.

NASHVILLE – The Tennessee State Employees Association objects to the continued inaccurate portrayal, by some members of the media and others, of the state health insurance plan as a taxpayer-subsidy.

“More than 43,000 State employees, including legislators, receive health insurance as part of their benefit package for serving the citizens of Tennessee,” TSEA Executive Director John Summers said. “Our state employees earn their compensation. We object to any attempt to define any portion of our compensation package, including our health insurance, as a taxpayer-subsidy. Simply funding something with taxpayer dollars does not automatically make it a taxpayer subsidy. In comparison, committing $165 million tax dollars in this year’s budget to Volkswagen to help expand an automobile manufacturing plant in Chattanooga, that is a taxpayer subsidy.”

Nearly all large employers in America offer group health insurance to their employees in order to remain competitive in the marketplace. The state health insurance plan is much like a private company’s employer-sponsored health insurance which is funded in part by the private business as part of an employee benefit package. As part of the overall compensation package offered by the state, plan members pay 20% of their insurance premiums.

“TSEA has no position on Insure Tennessee,” TSEA President Bryan Merritt said. “We believe health insurance for state employees is a totally separate issue. Insure Tennessee should be debated on its own merits.”

Enacted in 1976, TCA 8-27-201(g) defines state employee to include members of the general assembly. Benefits Administration, the division of the Department of Finance and Administration responsible for managing the state-provided health insurance benefits, verified to TSEA that state legislators have access to the same health insurance plan options as state employees.

According to 2014 data from the National Conference of State Legislatures, Tennessee’s Legislators are in the bottom third in the Nation for state legislator pay.

The state insurance plan provides coverage to over 270,000 state and local government employees and their family members.

Founded in 1974, TSEA represents the rights and interests of 43,000 state employees in Tennessee and has a rich history of improving the lives of its state employee members. For further information, visit TSEA’s website at


The following Q&A is from an email between TSEA and Benefits Administration:

Do both state employees and legislators choose between the PFH PPO and the Standard PPO? Yes. Legislators are eligible for the same plan options as state employees

Are the actual covered benefits any different/richer? No

Is the premium sharing between the state and the employee/legislator the same during active employment? Yes

Is premium support based on years of service at retirement the same for both employees and legislators? Yes

Is there a minimum number of years of service a legislator must have to continue insurance at retirement like the 10 years state employees must have? No, a legislator is eligible to continue health insurance coverage when they leave office regardless of the number of years they served, unless convicted of a felony based on conduct as a legislator. While there is no minimum number of years, per TCA 3-1-116, a member must have been elected and served a full term.

Are legislators required to leave the state plan at age 65 when they become Medicare eligible, as state employees are, or are they allowed to remain on the plan with Medicare as their supplemental coverage? Any active employee or currently serving legislator who is 65 or older can stay on the state plan as long as they are active. Legislators are eligible to continue in the state’s plan when they retire and can stay in the plan when they become eligible for Medicare. Medicare is primary and the state plan is secondary.

If so, how much does the state plan pay toward the Medicare supplement for legislators and what are their requirements for eligibility, if any? The Medicare Supplement is a stand-alone plan. Individuals do not qualify by virtue of having been in the State Group Insurance Program but are eligible for the Medicare Supplement if they are Medicare eligible and eligible to draw a monthly retirement allowance from TCRS. If a legislator is eligible for and elects to participate in the Medicare Supplement plan, premiums would be based on the same years of service schedule as other participants in the Medicare Supplement. There is no state support for any participating individual who has less than 15 years of service.