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State Employee Workforce , Compensation, Employment Levels & Health Insurance

State Employee Workforce , Compensation, Employment Levels & Health Insurance. Virginia Department of Human Resource Management Virginia Governmental Employees’ Association Sheraton Roanoke Hotel and Conference Center, Roanoke, Virginia May 11, 2013. Workforce. May 9, 2013.

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State Employee Workforce , Compensation, Employment Levels & Health Insurance

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  1. State Employee Workforce, Compensation, Employment Levels & Health Insurance • Virginia Department of • Human Resource Management • Virginia Governmental Employees’ Association • Sheraton Roanoke Hotel and Conference Center, Roanoke, Virginia • May 11, 2013

  2. Workforce May 9, 2013

  3. Virginia Population andState Employment Levels Virginia Population • 24% fewer employees per citizen in 2010 than in 1980 Virginia State Employment State Employees per Citizen May 9, 2013

  4. Executive Branch Full-Time EquivalentSalaried Employees • Change in salaried employees from 1999 to 2012: • 48.4% increase in Faculty • 1.4% decrease in Classified • 16.7% decrease in At-Wills Source: DHRM Data Warehouse as June 30th May 9, 2013

  5. Classified Employees Demographics Age Service • Average 12.1 yrs • Longest 55.9 yrs • ≥ 30 yrs service 8% • Average 47 years • Youngest 18 years • Oldest 88 years Source: DHRM Data Warehouse as June 30, 2012 May 9, 2013

  6. Classified EmployeesTurnover Turnover Turnover Reason • 10.8% turnover rate • 6807 employees Turnover by Years of Service Source: DHRM Data Warehouse as June 30, 2012 May 9, 2013

  7. Classified EmployeesWork/Life Balance • 24% of positions are eligible to telework, and • 29% of eligible employees telework at least one day per week • 54% of positions are eligible for an alternate work schedule, and 53% of eligible employees have an alternate work schedule Telework Alternate Work Schedule Positions Employees Positions Employees Source: DHRM Data Warehouse as June 30, 2012 May 9, 2013

  8. Compensation & Employment Levels May 9, 2013

  9. Classified EmployeesSalary & Pay Bands • Average Salary $44,149 • Median Salary $39,307 • Lowest Salary $15,371 • Highest Salary $247,890 Source: PMIS data as of December 31, 2012 Source: PMIS data as of September 30, 2012 May 9,, 2013

  10. Employee Salary by Region • Highest average salary is in Northern Virginia at $51,610 • 16.9% higher than the statewide average • Lowest average salary is in Southside Virginia at $38,461 • 12.9% lower than the statewide average Source: PMIS data as of December 31, 2012 May 9, 2013

  11. State Employee Salary ComparisonPay Compression • Salary compression • New employees demand market rate • State salaries on average are below market • New hires potentially paid more than experienced employees • Lack of funding to address the issue • Salary inequities May 9, 2013

  12. State Employee Salary Comparison Market Increases • State employee salary increases lag in all comparisons • Market • Consumer Price Index • Private Sector • Federal • Local Percent Increase CPI Increases Percent Increase May 9, 2013 Source: Appropriation Acts, Bureau of Labor Statistics

  13. State Employee Salary ComparisonSelected Localities • State dropped below the locality average in • FY 08 Source: DHRM survey May 9, 2013

  14. State Employee Salary ComparisonPrivate Sector Salary • On average, State salaries for selected occupations are 19.49% below Private Industry • In 2008, JLARC found State salaries 12% below market • By the end of 2013, State salaries will be 26.3% below market due to cumulative market movements Source: PMIS 9/1/12, Towers Watson, August 2012 May 9, 2013

  15. Pay Ranking of States Source: 2011 Bureau of Labor Statistics data based on payroll records of what is actually paid out to employees as reported quarterly to employment commissions May 9, 2013

  16. Pay Ranking of States • Virginia Pay Ranking • 2nd in Federal Government • same as 2010 • 9th in Private Industry • down from 8th in 2010 • 25th in Local Government • down from 23rd in 2010 • 33rd in State Government • down from 32nd in 2010 • 48th in State average as a percent of Private average • same as 2010 Source: 2011 Bureau of Labor Statistics data based on payroll records of what is actually paid out to employees as reported quarterly to employment commissions May 9, 2013

  17. Legislative UpdateSalaries • 2% increase in payroll tax on January 1, 2013 • 2% base salary increase to eligible salaried state employees on July 25, 2013 • Contingent on revenue estimates • Must have received at least “Contributor” rating for the performance cycle October 25, 2011 through October 24, 2012 • Compression pay increase on July 25, 2013 for employees with 5 or more years of continuous service, capped at 30 years of service • $65 per full year of service • $70 per full year of service for DSP sworn employees • Salary range changes • 2% increase to the minimum • 7% + $1,950 increase to maximum Source: Appropriation Acts May 9, 2013

  18. Legislative UpdateState Employee Compensation • Comprehensive review of compensation • Compression, • Recruitment and retention, • Hiring practices, • Strategies to minimize future disparities • Priorities • Public Safety • Deputy Clerks in District Courts • Study Timeline • Initial recommendations and findings due November 1, 2013 • Study completed by June 30, 2014 • Work Group Representatives • Money Committee staff • Executive Secretary of Supreme Court, • DHRM, DPB, others as needed

  19. Legislative UpdateOther Legislative Action • Human Capital Report • Reporting changed from annually to monthly • Annual statement of total compensation required for each classified employee • New requirement

  20. Health Care ReformAffordable Care Act (ACA) • $9.5 million minimum in estimated additional costs • Reduces annual contribution to Medical Flexible Reimbursement Account from $5,000 to $2,500 • Requires publishing of electronic Summary of Benefits and Coverage for all plans • Expands the definition of full-time employee for health care purposes • Provides coverage to all employees that work on average 30 or more hours per week • Applies to employers with 50 or more employees • Becomes effective January 1, 2014 May 9, 2013

  21. Health Care ReformFull-Time EmploymentStatus • Provides employers options for measuring the 30 or more hours, on average,per week May 9, 2013

  22. State Employee Health PlanFull-Time EmploymentStatus • Dates selected by the State Employee Health Plan to determine full-time employment status May 9, 2013

  23. State Employees Working 30+ HoursImpact on Health Plan • Incomplete data to determine impact of 30 or more hour rule on state health plan eligibility May 9, 2013

  24. State Employees Working 30+ HoursState Wage Employment Survey • Sent out a Wage Employment Survey • ~ 200 agencies surveyed • 158 agencies responded • 7,386 wage employees met the • 30+ hours criteria • Top 10 agencies with 30+ hour • employees responding to date May 9, 2013

  25. State Employees Working 30+ HoursFiscal Impact of Eligibility • Considered several options • Reviewed the fiscal impact May 9, 2013

  26. State Employee Health PlanEligibility Decision • Governor selected Scenario 1 capping all wage employees at 29 hours on average per week over a year Does not apply to teaching hospitals May 9, 2013

  27. IRS Guidance Needed “Hours Paid” versus “Hours Worked” Adjunct Faculty Seasonal Employees Variable Hour Employees May 9, 2013 9

  28. Health Benefits

  29. FY 2012Health Plan Enrollment • 101,954 employees eligible for state health benefits • 92,482 employees enrolled in all plans • 207,197 members enrolled in all plans May 9, 2013

  30. FY 2012 Cost Trends Total program expense increased 3.5% in FY 12 $883.3 million total claims paid in FY 12 6.7 million total claims processed May 9, 2013

  31. FY 2012 Total Cost Per Employee $13,249 total cost per employee in FY 12 4.2% increase in FY 12 from prior year May 9, 2013

  32. FY 2012Cost Drivers • Expensive procedures • Treatment of chronic conditions • Prescription drug therapy cost • Employee lifestyle • Average employee age April 18, 2013

  33. FY 2012Top Ten Claims Expense • $533 million of total plan expense • 59% of total plan expense • Obesity related • Diabetes • Coronary artery disease • Hypertension • Musculoskeletal disorders • Digestive disorders • High cost specialty drugs required • Rheumatoid arthritis • Multiple sclerosis May 9, 2013

  34. Legislative Update - COVA CarePlan Design Recommendations • Increase the Emergency Room Co-pay Change • Establish a Retail Maintenance Network May 9, 2013

  35. Year End BalancesHealth Insurance Fund • FY 2009 – $228.4 million at year end • FY 2012 – down 70 percent to $69.4 million • FY 2013 – projected at $6.3 million May 9, 2013

  36. HIF Line of Credit • Contingency Reserve – covered under Line of Credit • $76 million for Active Employees to be included in Line of Credit • Incurred But Not Reported (IBNR) – rebuild over 5 years with unfunded balance included in Line of Credit • $91 million IBNR for Active Employees • $17.5 million to be funded the first year • $74 million to be included in Line of Credit • Line of Credit – increase to$150 million from $50 million May 9, 2013

  37. Options Employee Health Plans COVA Care (PPO) COVA HealthAware (CDHP) COVA HDHP Kaiser Permanente (HMO in NOVA) TRICARE Supplement May 9, 2013

  38. New Wellness EngineMyActiveHealth • Applies to both COVA Care and COVA HealthAware • Includes a Health Assessment survey • Premium reduction of $17/$34 per month if complete Health Assessment between May 1 and May 24, 2013 • Continue premium reduction if complete biometric screenings between August 1 and October 31, 2013 • Tracks activity with Web-based portal • Disease Management (e.g. Diabetes, COPD, Asthma, CHF) • Smoking • Weight Management • Nutrition • Maternity Management • Bariatric Surgery Pre-education • Physical Activity • Allows employees to customize their portal May 9, 2013

  39. New CDHPCOVA HealthAware • Uses co-insurance rather than co-payments • Provides for a Health Reimbursement Arrangement (HRA) • Rewards employees $600 on July 1, 2013 • Rewards spouses $600 on July 1, 2013 • Rewards employees up to $150 for 3 “do-rights” • Annual Exam • Dental Exam • Flu Shot • Tracker utilization of 3 times per month per quarter • Rewards spouses up to $150 for 3 “do-rights” • Annual Exam • Dental Exam • Flu Shot • Tracker utilization of 3 times per month per quarter May 9, 2013

  40. Summary BenefitsPlan Comparison

  41. FY 2014 Premium Rewards

  42. Resources • Health Benefits Plan Decision Assistant • www.alexforcova.com • Resources to help employees manage their health • www.myactivehealth.com/COVA • Department of Human Resource Management • http://www.dhrm.virginia.gov • Annual Compensation Report • http://www.dhrm.virginia.gov/reports/AnnualSalaryReport2012.pdf • Annual Health Benefits Report • http://www.dhrm.virginia.gov/hbenefits/ohbcommunications/reports/annualreport2012.pdf • Review of State Employee Health Insurance Fund • http://www.apa.virginia.gov/reports/HealthInsuranceFundSR2011.pdf May 9, 2013

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