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Board briefed on LTD enhancement to $450 and $18M reserve drawdown to general fund
Summary
Staff said the legislature’s budget language would allow the employer‑paid long‑term disability benefit to increase (employer share moving from $240 to $450) while drawing down about $18 million from LTD reserves into the state general fund as part of deficit mitigation.
Tanya Jewell presented the agency's budget items and highlighted an employer‑paid long‑term disability (LTD) enhancement included in biennial decision packages. She said actuarial analysis with the program's vendor shows the current employer premium level can support increasing the employer‑paid benefit to $450 and that the legislature included limited administrative support in the budget for SB 5083 implementation.
Tanya also told the board the agency plans to draw down approximately $18,000,000 from employer‑paid LTD reserves and deposit those funds into the state general fund as part of a package to reduce the budget deficit. She said actuarial review confirmed the premium level is sustainable under current projections but emphasized the agency sought to be cautious so it would not need to return to the legislature for premium increases in a few years.
Board members asked about tradeoffs between reserve draws and future benefit funding; staff said they had modeled alternatives but concluded the reserve draw and modest enhancement were manageable within current actuarial assumptions. Staff will return with sustained fiscal impacts and implementation details if the final conference budget retains the language.
