The TSEA Board of Directors on Saturday voted to oppose legislation that would eliminate longevity pay for all executive branch state employees and make significant reductions to the state health insurance plan.
TSEA invited DOHR Commissioner Rebecca Hunter and Deputy Commissioner Danielle Barnes, as well as the Executive Director of Benefits Administration Laurie Lee to attend Saturday’s Board of Director’s meeting to explain the proposals in detail.
TSEA is very appreciative of the time and detailed information provided by Commissioner Hunter, Deputy Commissioner Barnes, and Executive Director Lee.
What do the Bills do?
SB606/HB647 – The Compensation Enhancement Act
If adopted, this bill would eliminate Longevity Pay for Executive Branch employees as of June 30, 2015. Employees would receive a one-time, permanent increase in their base salary equal to half of their longevity payment due, effective July 1, 2015 – after that, Longevity Pay would cease to exist.
Beginning in January, a Pay-For-Performance (or Merit Pay) system would be implemented. All employees evaluated as “Valued” would receive a 2% pay increase; employees evaluated as “Advanced” would receive 3%, and those evaluated as “Outstanding” would receive 4% for FY2016.
Unlike Longevity Pay, future performance-based salary increases will not be statutorily guaranteed, but subject to available funding each fiscal year.
Longevity Pay is the only statutorily-guaranteed salary increase for state employees.
SB607/HB648 – State Sponsored Health Insurance
The proposed changes to the state insurance plan are a bit more complicated. The following synopsis of SB 607 is not all-inclusive; but generally, this is how it affects current state and higher education employee insurance benefits:
- The proposed legislation will reduce the percentage paid by the state for an employee’s dependent(s) beginning in calendar year (CY) 2017. For CY 2016, current benefits remain at 80% for employee and dependent coverage. However, in CY 2017 the state will reduce the amount they pay for dependent coverage to 75% and in CY 2018 the state will reduce the amount they pay for dependent coverage to 70%. This means by CY 2018, employees will pay 12.5% more for their dependent coverage.
- The state and local education insurance committee will have the flexibility to offer a defined contribution or defined benefit to current state, higher education, and local education employees for pre-65 insurance.
- Currently part-time employees who have worked for the state for at least 24 months, and who work at least 1,450 hours per year, qualify for health insurance coverage. Proposed legislation would eliminate this benefit for employees hired July 1, 2015 and thereafter.
- Proposed legislation would allow the state to deny coverage to spouses of state employees who are eligible for similar group health insurance through the spouses’ employers.
- Currently, pre-65 retirees can continue their state insurance coverage with a minimum of 10 years of service and a specified length of time on the plan immediately prior to retirement. The state pays 80% of the premium for retirees with 30 or more years of service, 70% of the premium for retirees with 20-29 years of service; and 60% of the premium for retirees with 10-19 years of service. Proposed legislation intends to eliminate this current benefit for employees hired July 1, 2015 and after.
- Currently, Medicare-eligible retirees who have a minimum of 15 years of service are offered the state’s Medicare supplement plan called the Tennessee Plan. For retirees with 30 or more years of service the state pays $50 toward the monthly premium; for retirees with 20-29 years of service the state pays $37.50 toward the monthly premium; and for retirees with 15-19 years of service the state pays $25 toward the monthly premium. Proposed legislation intends to eliminate this current benefit for employees hired July 1, 2015 and after.
TSEA is not only concerned with how this legislation affects our current state employees, but how it will impact all future workers.
After discussion and consideration, the TSEA Board voted to oppose both bills.
Tomorrow, TSEA will make a presentation to the House State Government Committee. We will outline our concerns with the legislation and publicly announce our opposition to these bills.
On Wednesday, there is a possibility of a vote on the Longevity Bill during the House State Government Sub-Committee.
What can you do?
Contact YOUR legislator and tell them you oppose these bills. Let them know how important Longevity Pay is to you and your family.
IMPORTANT – ONLY CALL YOUR LEGISLATORS. And when you call, tell them your address so they can verify you are their constituent. PLEASE DO NOT CALL LEGISLATORS IN OTHER DISTRICTS. Calling Legislators from other districts could be counter-productive to our efforts, as legislators begin to assume all calls are from outside their districts and they stop listening to our concerns.
TSEA will continue to keep you updated and informed as more information is made available.