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More on the state insurance plan
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Last week, we explained the make-up of the State Health Benefit Plan and problems associated with the plan over the past few years. This week’s column touches on changes for the 2013 plan year starting Jan. 1, 2013.

Plan year 2013 changes
In order to fill this deficit and to ensure the Plan’s long-term financial stability, DCH is employing a variety of strategies. So what is in store for SHBP in calendar year 2013?

Most who are covered by SHBP know that premiums will be increasing by an average of 9.5 percent. The first 7.5 percent increase is a base premium increase, and the remaining 2 percent increase is to provide for the additional cost of Affordable Care Act requirements.

Ultimately, the department’s goal is to bring all contributions closer to 25 percent employee-paid, with the employer carrying the remaining 75 percent. This is somewhat typical among employer-sponsored health plans in state government.

DCH also will be continuing its Wellness Program. SHBP’s Wellness Plan, which is the largest wellness plan in the country, boasts 330,000 members. Wellness plans have been used by large employers such as Coca-Cola, Home Depot and G.E. to get a handle on health costs. The logic is that if employees are incentivized toward wellness and prevention, that costs will be lowered over time.

The Wellness plan requires employees to complete biometric screenings for blood pressure, cholesterol, blood sugar, and BMI. As part of completing the wellness “promise” employees are rewarded with a higher number of HRA “credits,” which, in short, pay the first dollars of eligible health expenses.

Over half of SHBP members enrolled in the wellness plan in calendar year 2012, which is considered above average for a first-year wellness program. Over half of those enrolled in the wellness plan completed the required screening. With this being the first year of the program, it is difficult to ascertain the impact.
In the private sector, for those companies that did measure their outcomes, 14 percent reported a small return on investment, and 15 percent reported a modest return.

October revenues up slightly, YTD still under 5 percent
October’s revenues increased $83.4 million on total revenues of $1.3 billion for the month or 6.4 percent.

This completes one-third of the fiscal year and year-to-date figures continue to lag 5 percent, coming in at 4.8 percent, which is exactly what FY 2012 finished at: 4.8 percent.

Individual income taxes for the month showed $756.9 million for a gain of $57.2 million, or 8.2 percent.  Individual income taxes were buoyed by individual withholding payments being up 7.6 percent, or $53.2 million, and estimated payments up another $1.25 million although individual income tax refunds also increased 4.4 percent or $4.2 million.

Sales tax collections for October continued the direction of the past few months, showing a very flat trend line. Gross state October sales tax collections were actually negative, down 0.7 percent while net state sales tax receipts were slightly positively at 0.5 percent. This is a matter of concern going into the holiday buying season.

Also negative for the month were motor fuel tax receipts, down by $4.8 million, -5.9 percent, with fuel sales taxes at -9.6 percent and excise taxes at -0.9 percent.

Corporate income taxes continued to be a bright spot, showing a gain of $5.7 million. Tobacco and alcoholic beverages were both up a total of some $4.9 million.

Year-to-date revenues are lethargic
Completing one-third of the fiscal year, Georgia’s state revenues total $5.6 billion with an increase of $258.4 million but totaling only 4.8 percent for the four months. Actually if you look at the trend over the last 12 months, the state is only growing at a 4.2 percent annual rate.

Individual income tax collections for the four months total $2.9 billion on an increase of only $115.6 million, a growth rate of only 4.0 percent.

Sales and use taxes are especially troublesome, with overall state sales really flat at 0.3 percent growth. State collections are showing $1.8 billion or only $47.8 million for the year so far. Only by adjusting local distribution do the state sales tax collections grow at 2.7 percent for the four months. The most noticeable decrease in sales tax collections was in utlities and energy, which decreased some $38.5 million for the period.

Year-to-date motor fuel taxes are down $16.5 million for the first four months or 4.9 percent, with excise taxes at -1.3 percent and sales taxes at -7.6 percent.

Corporate income taxes continue to show a positive trend totaling a gain of $88.6 million YTD, which is a 101.2 percent gain over last year. This may be due mainly to refunds being down $59.7 million for the four months.

Tobacco and alcoholic beverages are negative for the year so far at -3.5 percent and -1.8 percent, respectively.

So some improvement was shown this month in revenues with some strength in individual income taxes but sales taxes continued very flat for the period.

I may be reached at
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