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JFAC hears overview of state employee benefits: health insurance rate change and PERSI costs highlighted
Summary
Legislative analysts told JFAC that benefits are about a quarter of personnel costs; the governor proposed a per‑FTP health appropriation of $14,300 (the presentation cited a $56.6 million cost difference versus a lower actuarial target) and staff summarized current PERSI employer rates.
Frances Lippitt, a budget and policy analyst with the Legislative Services Office, told JFAC that employee benefits account for roughly one‑quarter of personnel costs and that health insurance is the largest single component of benefits.
Lippitt explained how the health insurance appropriation is budgeted per full‑time position (FTP) and how the recommended appropriation level balances planned premiums with the plan's reserves. "Using that balance as the target, the state would appropriate $13,960 per FTP for fiscal year 2026. However, the governor's recommendation is to appropriate at $14,300 per FTP," Lippitt said; the presentation listed the fiscal effect of the governor27s change at about $56.6 million.
Why it matters: health insurance appropriations and retirement contribution rates are significant drivers of personnel cost growth. The committee will consider CEC (Change in Employee Compensation) recommendations for salary and benefit adjustments as part of program maintenance.
PERSI and variable benefits: Lippitt summarized employer contribution rates the presentation cited: about 11.96% for general members, 14.65% for public safety employees, and 13.47% for teachers. She also explained that variable benefits (PERSI, Social Security, Medicare, life insurance, workers' compensation and HR fees) are budgeted at roughly 23% of employee salaries in FY2025.
Distributional detail: Lippitt showed how benefit costs vary by salary level — lower‑paid positions require a higher percentage of salary to be budgeted for benefits — and described the CEC process: the Change in Employee Compensation committee evaluates DHR recommendations and presents CEC proposals to JFAC.
Ending: Lippitt offered to answer technical questions; committee members asked for more detail on reserves and the actuarial basis behind the per‑FTP recommendation.
