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Staff present overview of state employee benefits: health appropriation, PERSI rates and budget impact
Summary
Legislative analysts summarized how health insurance, pension contributions (PERSI) and other benefits factor into personnel budgeting. Health insurance is the largest benefit cost; the governor proposed a higher per-position appropriation to limit drawing on reserves.
Frances Lippitt, budget and policy analyst with the Legislative Services Office, gave JFAC an overview of how employee benefits are budgeted and the items the committee must consider when setting personnel costs.
Lippitt said benefits account for roughly one-quarter of the state's personnel expenditures and that health insurance is the single largest benefits cost. She explained how the appropriation for health insurance is built per full-time position (FTP) and how the appropriation includes premium, a sweep for employees who do not enroll, and a reserve target (10% of expected premiums) to limit the state's exposure to claim volatility.
The nut graf: the governor recommended appropriating $14,300 per FTP for health insurance for FY2026 (LSO's actuarial target for the plan), a higher and more conservative level than the $13,960 per FTP baseline that maintains the 10% reserve target; the governor's approach reduces reliance on drawing reserves but increases near-term appropriations by about $56.6 million.
Key numbers and context: Lippitt summarized variable benefits (PERSI, Social Security, Medicare, life insurance, workers' compensation) that amount to roughly 23% of an employee's salary. She reported employer contribution rates to PERSI used for budgeting: 11.96% for general members, 14.65% for public-safety members, and 13.47% for teachers; employer contributions totaled about $141.5 million in FY2024. She illustrated how benefit percentages change proportionally with salary levels (higher-paid positions have lower benefit-share percentage of total compensation).
Committee process notes: Lippitt said recommendations on total compensation and benefit structure come through the Joint Change in Employee Compensation (CEC) committee, which evaluates executive recommendations and public testimony and forwards compensation recommendations to JFAC.
Ending: Lippitt invited committee questions and offered to provide further actuarial and reserve-detail material as members develop program-maintenance and compensation options.
