Health Insurance Update For School district employees Effective July 1, 2002

State Mandate $150 minimum effort Indexed contributions Maintenance of effort (In Audit Footnote) Example: Contributions/full time FTE X full time FTE’s

Full time employees For calculation purposes, any employee that is a contributing TRS member. For LISD, any employee working 20+ hours per week

Election Forms Explanation of $83.33 benefit Election form for - Health insurance - Health expenses – section Income compensation English and Spanish Notice by July 1, 2002 Election by August 1, 2002 New Insurance by September 1, 2002

New Funds Funds for minimum effort = 0 Funds for transition aid = $900 per year or $75 per month HOWEVER only if above 75% of formula gain in Tier II aid. Meaning, the State is mandating how to spend the new funds that we would have used for salaries. Funds to LISD to the employee = $1,000 or $83.33 monthly

Options for Employees For the $1,000, (Around July and August) - Buy more health insurance for him/her or dependent - Establish a cafeteria plan – 125 for health care expenses - Receive funds as income compensation subject to FIT- not eligible for TRS

$83.33 Funds Will use fund 418 Will use expenditures code 6132 Will report it the 10 th of the month Will receive it the 20 th of the month for employees active contributors to TRS

Impact Employees that traditionally rejected insurance may want to be added now = Additional cost to LISD Type of Plan = Contributory vs non-contributory Required Plans =Three New plans that we are seeking proposals for. Required mandate to spend on this program with funds that would have gone for salaries.

Type of Plans TRS required that districts provide the following levels Low Option, High Option and State Option

Summary MOE = $7,229,271/3.284 = $ Required Minimum $150 Excess MOE = $33.45 to be used for salaries higher than in FY FROM LISD (1) LISD will contribute $225 per month in health contributions AND (2) $33.45 per month in additional salary compensation FROM STATE (3) $83.33 per month will come from the State

What’s Next Define LISD Contribution: $225 per month Define State Contribution: $83.33 ===================================== Last year’s Rates $209 and $223 per month Define Plan Level: 4 proposals Define Negotiating Team: Define Input from Employee Advisory Committee ===================================== Employees to Submit response by Aug 1 st July and August will be enrollment period Board Decision by June 13th New Policy by Sept 1st Total available $308.33