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* From page 58 of the governor’s new Budget Book. I’m told that CMS has some proposed legislation, and “there have been some preliminary meetings with stakeholders”…
The Community College Insurance Program (CIP) is a jointly funded health insurance program for community college retirees. Statute determines the amount paid by the State, community colleges, retiree participants and active community college employees. Current contributions only fund 76 percent of the liability which results in unpaid bills. Without statutory change, the backlog of bills for this program will reach $110 million by the end of fiscal year 2024. This represents a backlog of unpaid bills of 38 months.
Currently, active employees, community college districts and the State each contribute at a rate of 0.5 percent of active employee pay (approximately $5.2 million/year each). Unlike other programs, CIP has no statutory escalator on the contribution rate; as a result, the contribution rate today is the same as it was 20 years ago.
With no rate changes, CMS projects CIP will have a deficit of approximately $214 million by fiscal year 2032, which would create a bill backlog of about four and a half years. The Governor proposes working with stakeholders to address the needs of the program. To demonstrate the State’s commitment to the program, an additional $25 million was contributed from the fiscal year 2023 budget. Future contributions will be determined by the outcome of the work with the stakeholders.
Oof.
posted by Rich Miller
Tuesday, Feb 21, 23 @ 1:31 pm
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Yes, this should be addressed and paid promptly.
Comment by DuPage Tuesday, Feb 21, 23 @ 1:46 pm
== CIP has no statutory escalator on the contribution rate; as a result, the contribution rate today is the same as it was 20 years ago. ==
There in lies the problem. As a professor, I would guesstimate that Faculty wages have increased roughly 75% over the past 20 years (I am entering my 19th year as a public university professor).
I would also guesstimate that the cost of medicine has increased much, much more over the past two decade. At the same time, I would guesstimate that the number of professors paying into healthcare plans is no more than, and maybe fewer than the number 20 years ago.
If even remotely correct, changing the percentage paid by recipients is the most parsimonious solution to ensuring the continued coverage for retirees going forward (short of socializing medicine).
Comment by H-W Tuesday, Feb 21, 23 @ 1:47 pm
==The Governor proposes working with stakeholders to address the needs of the program==
Is that like Rauner’s “Grand Bargain?”
Comment by Demoralized Tuesday, Feb 21, 23 @ 1:48 pm
Holding increased future payments for employees / retirees health insurance is not a good look.
This kind of looks like extorting changes to the fund …/s?
Comment by RNUG Tuesday, Feb 21, 23 @ 2:02 pm
Funny for reading this today. I’m a retired CC instructor. Earlier today I was on the phone with the insurance company (named redacted) for my wife about a bill that has been in limbo since September 2021. The insurance agent told me that the bill will be paid by them, but they are still waiting for the money from CIP.
Comment by G'Kar Tuesday, Feb 21, 23 @ 2:38 pm
I have repeatedly asked about the data in this link. So has DuPage, among others.
https://capitolfax.com/2022/08/04/extended-open-thread/#comment-13549561
Is this a “side effect” of the Edgar Era GA / State University Agreement that universities, in exchange for paying group insurance costs for their “income funds” employees, those funds no longer had to be appropriated? Remember Vince DeMuzio in an appropriation hearing saying that agreement reduced legislative visibility. According to IOC Detailed Annual Reports, “income funds” were appropriated in FY 1997 but weren’t from FY 1998 forward.
The community college / state university nexus is community college retirement is part of SURS. Been around a while, but this predates my time. Anyone else?
Comment by Anyone Remember Tuesday, Feb 21, 23 @ 5:02 pm
This was brought up in the FY20 introduced budget. CIP was in a deficit and TRIP was in a surplus. There was a plan to “right-size” rates for CIP 4 years ago to address this, but the Governor’s Office and CMS never took the initiative to get it done.. They did supplemental payments to the Fund, but never did the legwork to get a legislative fix.
Comment by Anonymous Tuesday, Feb 21, 23 @ 6:52 pm