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www.acps.k12.va.us

Compensation & Benefits

School Board Budget Work Session

January 27, 2015

www.acps.k12.va.us www.acps.k12.va.us 2

Discussion Topics

Compensation & Benefits Philosophy Recent Pay Actions Market Competitiveness Benefit Premium Changes RFP Update for Self-Insurance Administration Sick Leave Retirement Incentive Healthcare Reform Overview and Impact


Essential Questions

• How do we ensure that we remain competitive in the regional marketplace for employee salaries?

• What are the major changes in the Compensation and Benefits budget?

• What is the status of the joint RFP for self-insurance health care coverage?

• What are ACPS’ plans regarding the sick leave retirement incentive?

• How has Healthcare Reform impacted ACPS and what mandates are on the horizon?


ACPS Compensation & Benefits Philosophy

Salary and benefits are key factors in employee recruitment and retention. The goals of ACPS compensation and benefit plans are: – To attract and retain highly skilled employees, – To remain competitive in the market, and – To provide a balance of salary and benefits that meets the needs

of our employees and their families.


ACPS Pay Actions

Step Increase Market Rate Adjustment

FY 2009 Full Step No

FY 2010 Full Step, Mid-Year No


FY 2012 Full Step No

FY 2013 No Yes


FY 2015 No Yes

Proposed FY 2016 Full Step No


Market Competitiveness

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

School Division

Market Rate

Adjustment Step

Increase

Market Rate

Adjustment Step

Increase

Market Rate

Adjustment Step

Increase

Market Rate

Adjustment Step

Increase

Market Rate

Adjustment Step

Increase

Alexandria City No Full Step Mid Year No Full Step

2.2% + 5% VRS No No

Full Step Mid Year

2% Support; 1% Other No

Arlington County No No No Full Step 2.68% + 5%

VRS No No Full Step 2% No

Fairfax County No No 1% Full Step 1.25 % + 2%

VRS No 2% Mid Year No No Yes**

Falls Church City No No No No No Yes 1% Full Step 1% Full Step

Loudoun County No No 3% No Yes* No 2% No 2.6% to 4%+ 1%

VRS *** No

Manassas City No No 2.25%-2.36% No 2.5% + 1% VRS No No Full Step 2% Full Step - Teachers

Montgomery County No No No No No Yes No Full Step 1.5% Full Step

Prince George's County No No No No N/A N/A 2% Full Step

Prince William County No No 2.35% No 1% VRS No 2% No 2% + 1% VRS No

*Increased each step by a fixed dollar amount ** Delayed until November 1 for teachers *** New salary scale resulting in 4% increase for teacher plus 1% increase given for VRS implementation


Market Competitiveness – Teacher Compensation Division Beginning Teacher,

Bachelors Degree, Step 1

Falls Church City $48,500

Loudoun County $47,500

Alexandria City $47,242

Arlington County $47,228

Fairfax County $46,756

Montgomery County $46,410

Prince George’s County

$46,380

Manassas City $46,078

Prince William County

$45,998

Manassas Park City

$44,490

Division Experienced Teacher, Masters Degree, Step 10






$64,776

Prince William County $62,482




Manassas Park City $58,373

Division Maximum Salaries



$109,609


Manassas Park City $106,321







$100,775

Source: Washington Area Boards of Education (WABE) – FY 2015 Guide


Market Competitiveness – Support Employee Compensation

Division Paraprofessional Beginning

Hourly Rate

Montgomery County

$ 17.79

Alexandria City

$ 16.26

Manassas City $ 16.10


$ 15.78

Loudoun County

$ 15.47

Arlington County

$ 15.33

Manassas Park City

$ 15.04

Falls Church City

$ 14.96


$ 14.52

Fairfax County $ 14.47

Source: Washington Area Boards of Education (WABE) – FY 2015 Guide

Division Paraprofessional Maximum

Hourly Rate


$ 31.45

Arlington County

$ 30.44

Fairfax County

$ 30.40

Manassas Park City

$ 30.13

Montgomery County

$ 29.52

Loudoun County

$ 29.25

Alexandria City

$ 28.80


$ 28.78

Manassas City

$ 28.17

Falls Church City

$ 27.54

Division Bus Driver Beginning

Hourly Rate

Arlington County $ 18.79



Falls Church City $ 18.05

Alexandria City $ 17.77

Loudoun County $ 17.74


$ 17.52

Manassas Park City

$ 17.49

Montgomery County

$ 16.36


$ 15.87

Division Bus Driver Maximum

Hourly Rate



$ 34.35






$ 31.89

Manassas Park City

$ 30.87


Montgomery County

$ 25.96


Market Competitiveness – Support Employee Compensation Division School

Nutritional Asst. Beginning

Hourly Rate


$ 14.78


Arlington County

$ 13.70


$ 13.67

Montgomery County

$ 13.32

Alexandria City

$ 13.22 proposed

Loudoun County

$ 12.81

Falls Church City

$ 12.38

Alexandria City

$ 10.75 current


Division School Nutritional Asst.

Maximum Hourly Rate


$ 32.01


$ 25.69

Manassas City

$ 25.55

Loudoun County

$ 24.05

Falls Church City

$ 22.77

Alexandria City

$22.07 proposed

Montgomery County

$ 20.44

Arlington County

$ 20.25

Fairfax County

$ 19.30

Alexandria City

$19.04 current

Division Custodian Beginning

Hourly Rate



Montgomery County

$ 13.32


$ 13.10



Falls Church City

$ 12.38


$ 12.17


Division Custodian Maximum

Hourly Rate



$ 28.79






$ 22.30


Montgomery County

$ 18.08


Market Competitiveness – Library Media Assistant

Division Library Media Assistant ,

Beginning Hourly Rate


Alexandria City $ 16.26 Proposed


$ 15.87


Alexandria City $ 14.44 Current


Division Library Media Assistant , Maximum Hourly Rate


$ 34.35







Market Competitiveness – Bus Monitor

Division Bus Monitor , Beginning Hourly

Rate







N/A

Division Bus Monitor, Maximum Hourly Rate

Alexandria City

$ 24.12 Proposed


Falls Church City

$ 22.77

Alexandria City

$ 22.07 Current

Arlington County

$ 21.64


N/A


Market Competitiveness – Cafeteria Aide

Division Cafeteria Aide , Beginning Hourly

Rate




$ 11.13



Falls Church City N/A

Division Cafeteria Aide, Maximum Hourly

Rate

Prince William County $ 24.12





Falls Church City N/A


Market Competitiveness – Maintenance

Division General Maintenance,


Falls Church City

$ 17.77

Arlington County

$ 16.39

Alexandria City

$ 14.88 Proposed


$ 14.52

Alexandria City

$ 14.03 Current


Division General Maintenance,

Maximum Hourly Rate

Falls Church City

$ 32.70


$ 31.44

Arlington County

$ 26.55

Alexandria City

$ 24.85 Proposed

Fairfax County

$ 24.46

Alexandria City

$ 23.42 Current

Division Skilled Maintenance,


Falls Church City

$ 18.97

Alexandria City

$ 18.30


Arlington County

$ 17.56


$ 15.87

Division Skilled Maintenance,

Maximum Hourly Rate


$ 41.01

Falls Church City

$ 34.91





Market Competitiveness – Head Coach

Division Head Coach, Football

Arlington County

$ 7,492

Fairfax County $ 7,040

Falls Church City

$ 7,000


$ 6,780

Alexandria City

$ 5,520

Division Head Coach, Basketball

Falls Church City

$ 5,750

Arlington County

$ 5,665


$ 4,614

Fairfax County

$ 4,490

Alexandria City

$ 4,184

Division Head Coach, Cross

Country

Falls Church City

$ 5,250

Arlington County

$ 4,751


Alexandria City

$ 3,766


$ 3,150

Division Head Coach, Cheerleading

Arlington County $ 5,665


Falls Church City

$ 4,750


$ 3,816

Alexandria City $ 3,452


Market Competitiveness – Substitute Teacher

Division Short Term

Loudoun County $110

Arlington County

$ 106.96

Alexandria City

$ 105 Proposed

Fairfax County $ 100.24 – $148.90



$83 - $94

Division Long Term


Loudon County $154

Fairfax County $ 132.10 – $177.39

Arlington County $ 114.55 -$171.85


$113 - $140.80


Summary of Cost Increase in Compensation and Benefit Programs

FY 2016 Cost Increase/ (Decrease)

Virginia Retirement System ($ 0.48) Million

Health Insurance Plans - Medical, Dental ($ 1.57) Million

Full Step for Eligible Employees - Percent of Employees Not Eligible for Step

$ 4.29 Million 9.4%

Reclassification of Support Positions - Library Media Assistants - Bus Monitors - Cafeteria Aides - General Maintenance Workers

$ 92,826

School Nutrition Workers (School Nutrition Fund) $ 74,738

Increase Stipend for Head Coaches $ 25,000

Increase Short Term Substitute Teacher Pay Rate $ 157,582


Current Healthcare Participation

Approximately 1,750 employees or 75% of all eligible employees participate in a medical plan, either with the fully insured Kaiser plan or self insured United Healthcare plan • Highest participation with the self insured medical plan, currently with

United Healthcare • 57% of participants elect individual coverage

57%

19%

24%

Employee Only

Employee + 1

Family


Health Insurance Participation Active Employees

0

100

200

300

400

500

600

700

800

900

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Kaiser HMO Kaiser POS UHC HMO UHC POS


Retiree Health Insurance

ACPS offers retiree medical and prescription drug coverage – ACPS subsidy maximum $265 per retiree per month – Monthly retiree health credits of $4 per year of service (must have 15

years of service with Virginia Retirement System) – Participation has increased over time

• 465 retirees and their dependents enrolled in an ACPS medical plan • 60% of participants enrolled in Medicare plans (Kaiser Medicare Plus and UHC

Medicare Advantage)

Retirees may also continue to enroll in dental and vision plans and pay full cost


Healthcare Participation Retirees

0

50

100

150

200

250

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Kaiser HMO Kaiser POS Kaiser Medicare Plus UHC HMO UHC POS UHC Medicare Advantage


Healthcare Trends ACPS Premium Rate Increases

Health Plan FY 2011 FY 2012 FY 2013

FY 2014 FY 2015

Proposed FY 2016

Self Insured Medical 13% 20% 9.8% 0% 0% -15%*

Fully Insured Medical - Kaiser

5% 14% 0.2% 5% 1% 5%

Fully Insured Dental 0% 3%

8% 8% 12% 15%**

Fully Insured Vision New Plan 0%

0% 0% 0% 0%

* ACPS self-insurance healthcare premiums were increased in prior years to establish a sufficient reserve and cover the projected healthcare costs. However, with the transition of Medicare eligible retiree participants to a fully-insured Medicare Advantage plan, actual claims costs have declined for the self-insurance plan. Consequently, the current self-insurance premiums have been reduced by approximately 15% to more appropriately align with current cost trends and the covered participant base.

** Increase in dental costs have been passed on to employees; ACPS contributions to the dental plan remain the same dollar amounts as in FY 2015. As a result, employee premiums will increase by approximately 43 percent to $8.90 per pay for single coverage and $23.32 per pay for family coverage.


Healthcare Cost Sharing Structure Employee Contributions – HMO Plan

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Administrator/SupportAbove Grade 25

Professional(Teachers)

Support Below Grade25

85% 77%

90%

15% 23%

10%

ACPS Employee

FY 2014 and FY 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Professional (Teachers) Support Below Grade 25

85% 75%

90%

15% 25%

10%

FY 2013


Healthcare Cost Sharing Structure Employee Contributions – POS Plan

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Professional(Teachers)

Support Below Grade25

70% 70% 70%

30% 30% 30%

ACPS Employee

FY 2014 and FY 2015

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

70% 68% 70%

30% 32% 30%

FY 2013


Request for Proposals (RFP) Self Insured Medical and Prescription Drug Plans

Joint RFP with the City of Alexandria issued in October 2014 to solicit proposals for the medical and pharmacy administration of the self insured health plans.

Medical and/or prescription proposals received in November 2014. Joint evaluation committee evaluated written proposals in December 2014. Finalists’ meetings in January 2015. Contract negotiation and award targeted for mid February 2015.


Sick Leave Payout at Retirement Incentive for Early Notice

• Also known as retirement sick leave incentive, available to eligible licensed employees and administrators.

• Memo sent to eligible employees in first week of February. Retirement early notice application must be received by HR by a certain deadline, typically at end of March.

• Increase sick leave payout for unused accumulated sick leave at retirement with two options available, lump sum or three equal installments.

• Based on an average of 30 eligible employees, estimated cost for this sick leave incentive is $162,000 to be spread over 3 years (current fiscal year and the following 2 fiscal years)


Sick Leave Payout at Retirement Incentive for Early Notice

Eligible employees choose one of the following two options:

– Option 1 80% of unused sick leave at the daily substitute rate for the employee group (licensed or administrator). Payments will be made in 3 equal annual installments.

– Option 2 Up to 100 days of unused sick leave at the daily substitute rate

for the employee group (licensed or administrator). Payments will be made in a lump sum.


Healthcare Reform Impact

Following is a summary of the changes that ACPS has implemented in response to Healthcare Reform requirements: Dependent coverage to age 26, effective July 1, 2010 Preventive care covered at 100% effective July 1, 2011 Over the counter drugs are not eligible for reimbursement under health care flexible

spending account, effective July 1, 2011 Health care flexible spending account capped at $2,500 effective July 1, 2012 Summary of Benefits and Coverage with the required contents and format, to be

communicated to employees, effective July 1, 2013 Women’s preventive care services expanded to include additional screenings, effective

July 1, 2013 Notice of Healthcare Exchange availability on October 1, 2013 for current employees and

within 14 days of start date for new hires on or after October 1, 2013 Comparative Effectiveness Fee (2012-2018) – Patient Centered Outcomes Research

Institute Fee (PCORI Fee) – First payment in July 2014 Transitional Reinsurance Fees (2014-2016) - Data submitted in December 2014 and first

payment made in January 2015


Healthcare Reform Impact Other requirements to be implemented include:

Auto enrollment into employer plan – employers are not required to comply until guidance is issued (no guidance to date)

Employer responsibility to provide affordable and essential coverage • Effective date for ACPS July 1, 2015 or Fiscal Year 2016 • ACPS medical plans meet the required minimum essential health insurance coverage. All

ACPS current medical plans exceed the minimum essential coverage • Essential coverage to 95% of full time (30 hours per week) employees and eligible

dependents – 70% instead of 95% in 2015 – 30 hours may change to 40 hours

• ACPS offers an affordable plan (unaffordable if exceeding 9.5% of wage). ACPS current lowest cost medical plan is Kaiser HMO, with monthly premium of $461 for single coverage. The lowest employee contribution is $46 per month for this plan. All full time employees of ACPS has wage exceeding the threshold of affordability.

IRC Section 6055/6056 Reporting – Filing return with IRS after close of each calendar year – effective 2016


Healthcare Reform Impact

Large Employers Access to State Exchange (2017) • Effective January 1, 2017 large employers will be able to access state exchanges. Virginia

has elected not to create a state exchange, large employers may be able to access federally facilitated exchange.

Excise Tax on High Cost Plans (Cadillac Plans) in 2018 • A 40% excise tax is imposed for plans with value of coverage exceeding $10,200 for

single coverage and $27,500 for family coverage • Currently ACPS most expensive medical plan is the UHC POS: $10,076 for single

coverage and $26,887 for family coverage.

Other requirements to be implemented include:

www.acps.k12.va.us Superintendent School Board

Karen A. Graf, Chairman Kelly C. Booz Ronnie Campbell William E. Campbell Patricia Ann Hennig

Stephanie A. Kapsis Justin Keating Marc Williams Christopher J. Lewis, Vice Chairman

Dr. Alvin L. Crawley

30

Glossary of Terms FICA Taxes

Federal Insurance Contributions Act (FICA) is a Federal payroll tax - Employees and employers must pay FICA to fund Social Security and Medicare programs, currently 7.65%

Full Step, Mid Year Full step is given at the middle of the school year or January 1

Healthcare Reform

Also known as the Patient Protection and Affordable Care Act (PPACA), signed into law in 2010. The law includes health-related provisions to take effect over the next four years, including expanding Medicaid eligibility, subsidizing insurance premiums, providing incentives for businesses to provide health care, prohibiting denial of coverage and claims due to pre-existing conditions, and establishing health insurance exchanges.

HMO Health Maintenance Organization - An organized healthcare delivery system that requires care to be rendered by in-network providers, except in case of emergency.

Kaiser Kaiser Permanente is a well known health maintenance organization with facilities located throughout Northern Virginia, Maryland, and District of Columbia.

Medicare Advantage Medicare Advantage Plan is a type of Medicare health plan offered by a private insurance carrier that contracts with Medicare to provide benefits.

MRA Market rate adjustment or cost of living increase

POS Point of service plan is a managed care plan that coordinates medical plan. Out of network benefits are available, subject to higher out-of-pocket expenses.

Retiree Health Insurance Credits The health insurance credit provides retirees with a reimbursement to assist with the cost of your health insurance premiums. The credit is added to monthly retirement benefit.

Supplemental Retirement Plan A defined benefit plan offered by Alexandria City Public Schools that provides retirement benefits in addition to the Virginia Retirement System.

UHC United Healthcare is a major health insurance carrier with national network of providers.

VRS Virginia Retirement System is a mandatory retirement plan for full time ACPS employees. VRS is the main retirement plan for many school districts in Virginia, as well the Virginia State employees.

VRS Basic Life Mandatory life insurance coverage of 2 times employee's annual salary

WABE Washington Area Boards of Education (WABE) - Annual statistical survey is completed by regional districts.

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