2016 Employee Benefit Issues
The Florida State Legislature began committee meetings for their 2016 Legislative Session on September 16, 2015. The Legislative Session will begin on January 12, 2016. It will conclude on March 11, 2016.
State Employees Group Health Insurance Program
HB 7089 - Relating to State Group Insurance Program
HB 7089 adds new products and services to the program by giving DMS broad authority to contract for a wide variety of additional products and services. Employees will be able to purchase new products as optional benefits. DMS is directed to contract with at least one entity that provides comprehensive pricing and inclusive services for surgery and other types of medical procedures. The contract requires cost savings to the program, which will be shared by the state and the enrollee.
Beginning in 2017, DMS is directed to contract with at least one entity that provides online health care price and quality information, including the average price paid for health care services and providers by county. The contract requires the entity to allow enrollees to shop for health care using the information provided to select higher quality, lower cost services and providers. The contract also requires the entity to identify any savings realized by the enrollee, and share those savings with the enrollee
Beginning in the 2019 plan year, the bill provides that state employees will have health plan choices at four different benefit levels. If the state’s contribution for premium is more than the cost of the plan selected by the employee, then the employee may use the remainder to:
- Fund a flexible spending arrangement or a health savings account.
- Purchase additional benefits offered through the state group insurance program.
- Increase the employee’s salary.
The bill directs DMS to hire an independent benefits consultant (IBC). The IBC will assist DMS in developing a plan for the implementation of the new benefit levels in the program. The plan shall be submitted to the Governor, the President of the Senate and the Speaker of the House of Representatives no later than January 1, 2018. The IBC will also provide ongoing assessments and analysis for the program.
The bill directs DMS to recommend employee contribution rates for standard plans and high deductible health plans for the 2017 plan year reflecting the actual benefit difference between the HMO and the PPO plans for both self-insured and fully insured products. The proposed enrollee premium rates for the 2017 plan year must be submitted to the Legislative Budget Commission (LBC) for review and approval. If the LBC does not approve the proposed rates, the rates provided in the 2016-17 General Appropriations Act will apply.
State Employee Retirement System
SB 7014 - Relating to Florida Retirement System
SB 7014 reestablishes renewed membership in the Florida Retirement System (FRS). A retiree of the FRS pension plan, the FRS investment plan, the Senior Management Service Optional Annuity Program (SMSOAP), the State University System Optional Retirement Program (SUSORP) or the State Community College System Optional Retirement Program (SCCSOAP) who is employed in a regularly established position with a covered employer on or after July 1, 2016, will be a renewed member in the FRS as follows:
- FRS (all retirees) → Investment Plan (any eligible class);
- SMSOAP → Investment Plan (any eligible class);
- SUSORP → SUSORP; or
- SCCSORP → SCCSORP.
A renewed member must meet the vesting requirements of the applicable plan in which he becomes a renewed member. Except for renewed members reemployed prior to June 30, 2010, creditable service does not accrue for a retiree’s employment in a regularly established position with a covered employer from July 1, 2010, through June 30, 2016, and no employer or employee contributions may be paid into a renewed member’s investment plan account for employment with a covered employer during this time period.
System-wide, the contributions paid into the FRS Trust Fund by employers participating in the FRS will be increased by $75.8 million annually.
The bill also requires employers to pay the full contribution related to the purchase of general military service under s. 121.111, F.S., in those instances in which the FRS member leaves the employment of a FRS-participating employer to report for active duty in the Armed Forces. This modification does not impact the FRS Trust Fund but does shift the costs of the service from the member to the employer.