Florida TaxWatch Analyzes Benefits of Extending State Group Insurance to Florida College System

FOR IMMEDIATE RELEASE: Tues., Feb. 21, 2023

CONTACT: Aly Coleman Raschid, aly@on3pr.com, 850.391.5040

Florida TaxWatch Analyzes Benefits of Extending State Group Insurance to Florida College System

Tallahassee, Fla. – Today, Florida TaxWatch (FTW) released Extending State Group Insurance to the Florida College System Case Study: Indian River State College. In this briefing, FTW analyzes the benefits of extending the State Group Insurance Program (SGIP) to the 28 colleges that comprise the Florida College System (FCS). Citing a December 2021 Office of Program Policy Analysis and Government Accountability (OPPAGA) study, FTW states that offering this defined benefit program – where the employee pays a fixed amount toward the monthly premium (for individual or family coverage) and the state pays the remainder – would be an investment in the continued development of Florida’s specialized workforce.

Florida TaxWatch President and CEO Dominic M. Calabro said, “Florida’s economy is strong, on track to rank among the top 10 global economies by 2030, which will bring higher earnings and greater tax revenue to the state, but it can’t reach this ambitious goal without the Florida College System operating at its full potential. Businesses are having a hard time finding qualified workers now, and by the end of the decade, two-thirds of all jobs are expected to require training, credentials, or a degree, so Florida colleges must continue to attract and retain talented faculty and staff, at all levels, to help further develop Florida’s specialized workforce.
“Last year, the Florida Legislature’s Office of Program Policy Analysis and Government Accountability looked into increasing competitiveness at state colleges by considering whether it was feasible to offer state insurance to state college employees, just like it does at other agencies and educational institutions. Florida TaxWatch reviewed that report and found that extending the State Group Insurance Program to the FCS not only presents an opportunity to alleviate colleges’ budgetary concerns caused by increasing health insurance rates, but also provides more affordable, comprehensive coverage for employees, making our state colleges more competitive employers in their communities.

“While there is an added expense to the state in the short term, Florida TaxWatch recommends policymakers make an important investment in Florida’s economy and future success by extending the SGIP to the FCS during the 2023 Legislative Session. This would go a long way towards supporting competitive faculty recruitment efforts, reducing turnover within each college, and enabling strategic investment in critical programs, providing an immediate benefit for students and businesses and bolstering both the regional and statewide talent pipelines.”

Throughout the briefing, FTW uses Indian River State College (IRSC) as a case study. IRSC, like the 27 other FCS colleges, is not authorized to offer SGIP to its employees, despite its similarities with eligible enrollees,such as reliance upon state funds and eligibility for the Florida Retirement System. As it is, FCS colleges must self-insure or self-fund using money from their operational budgets, so most participate in the Florida College System Risk Management Consortium (FCSRMC) to help mitigate those costs. However, while the FCSRMC does reduce health insurance costs, rates are still exceptionally high and continue to grow every year.

All FCS colleges pay a portion of their employee premiums, but none of them subsidize the premiums for dependents, which FTW claims can weigh heavily upon employees’ wallets. For example, an employee at IRSC must pay between $1,235 and $1,509 per month to cover a spouse and child. Within a year, this can amount to $18,000 worth of premiums.

FTW notes that, as a consequence of these high insurance costs, FCS employees are likely to find the benefits offered by other employers more desirable – especially when it comes to low-salaried administrative or maintenance positions. For example, a janitor may pay about two-thirds of his or her salary for a family plan offered by an FCS college, but the cost at a state agency or university should only range from three to nine percent of his or her salary.

According to FTW, the state has the following three scenarios to consider: 

• The FCS colleges remain responsible for their health insurance options and make room in their budgets for rising health insurance rates
• The FCS colleges remain responsible for their health insurance options, and the state chooses to increase funding
• SGIP is extended to the FCS

Extending SGIP to the FCS is the recommendation of FTW, though the taxpayer research institute cautions against launching a pilot program or granting eligibility in waves. It should be extended to the entire FCS at once, ensuring none of the FCS colleges are left in the FCSRMC with rates they cannot afford.

To learn more and access the full report, please click here. 

About Florida TaxWatch
As an independent, nonpartisan, nonprofit government watchdog and taxpayer research institute for more than forty years and the trusted eyes and ears of Florida taxpayers, Florida TaxWatch (FTW) works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on citizens and businesses. FTW is supported by its membership via voluntary, tax-deductible donations and private grants and does not accept government funding. Donations provide a solid, lasting foundation that has enabled FTW to bring about a more effective, responsive government that is more accountable to, and productive for, the citizens it serves since 1979. For more information, please visit www.floridataxwatch.org. 

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