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Committee briefed on state benefits, health insurance appropriation and PERSI costs
Summary
Legislative analysts outlined the state's employee benefits package, recommended per-FTP health appropriation for FY2026 and employer pension contribution rates as the committee begins compensation deliberations through the Change in Employee Compensation process.
Frances Lippitt, budget and policy analyst with the Legislative Services Office, presented an overview of state employee benefits and how those costs are budgeted in the general fund.
"Benefits generally account for about a quarter of the state's overall personal cost expenditures," Lippitt said, and explained that nearly half of total benefits spending is for health and dental insurance. She outlined the components budgeted per full-time position (FTP) and the variable benefits that are calculated as percentages of salary, including PERSI, Social Security, Medicare, life insurance, and workers compensation.
On health insurance funding, Lippitt told committee members that maintaining a minimum reserve equal to 10% of expected premiums reduces the state's exposure if claims exceed premiums. "Using that balance as the target, the state would appropriate 13,960 per FTP for fiscal year 2026," she said, and added that "the governor's recommendation is to appropriate at 14,300 per FTP, which reflects the actuarial recommendation designed to cover 100% of plan costs in 90% of cases." She said that difference produces a total cost of about $56.6 million.
Lippitt also summarized PERSI employer contribution rates: 11.96% for general members, 14.65% for public safety, and 13.47% for teachers. She said employer contributions totaled roughly $141.5 million in fiscal 2024.
Process note: Lippitt described how the Change in Employee Compensation (CEC) committee evaluates compensation and benefits recommendations and then forwards recommended employee compensation changes to JFAC for funding decisions.
Why it matters: benefits are a large recurring component of the personnel budget; changes to health premium appropriations or employer retirement contributions materially affect agency program maintenance costs.
Ending: Lippitt offered to answer follow-up questions and committee members said additional detail on reserve levels and actuarial assumptions would be available during CEC and subsequent working-group presentations.
