The Facts

* In FY 2015, ERS will provide insurance benefits to more than a half million state employees, retirees, and dependents.

* The FTE cap in FY 2015 in the General Appropriations Act was 218,367 compared to the FTE cap in FY 2013 of 235,047, a decrease of 16,720 due to the removal of patient income as an appropriated method of finance.

* Nevertheless, the appropriation for the ERS Health increased $533.2 million over the amount expended in 2013, a 20.5% increase.

* The cost of compliance with the Affordable Care Act in 2015 is estimated to be $121.2 million.

* Texas pays the full cost of the premium for state employees and half the cost of the premium for an employee’s dependents, a total appropriation of about $3 billion for the 2014-15 biennium. 

* Texas is among only a handful of states that cover the full cost of health insurance for state employees. Employees also have the option of participating in the TexFlex program—a Flexible Spending Account to which they make pre-tax savings deposits for out-of-pocket health and child care expenditures. The maximum contribution to TexFlex was cut in half to $2,500 in 2013 by the Affordable Care Act.

* In Plan Year 2004, the premium for employee-only benefits was $300 per month; for Plan Year 2013, the average monthly cost was $416. 

* ERS commissioned a Milliman study on the offering of an HSA to state employees. The state has long past the recommended start date of September 1, 2009. Had the state begun offering the HSA as an option, we would now be seeing the slower cost growth that HSAs have been shown to afford; their growth is roughly half the rate of traditional health insurance.

* Many states make large contributions—$2,750 annually in Indiana’s case—to employee HSAs, and yet still realize significant cost savings.


* Readjust cost-sharing for state employees, requiring them to pay a portion of the monthly premium.

* Offer state employees the option of a high deductible health plan (HDHP) with an HSA to control costs.

* Fund a significant portion of the HSA for employees who choose a HDHP to incentivize enrollment in the HSA option.