Travis County Commissioners Court
Tuesday, September 13, 2011 (Agenda)
Item 6
>> number 6, consider and take appropriate action on determining the feasibility of changes to the Travis County leave policy in order to mitigate the impact of catastrophic illness on employees.
good afternoon.
>> good afternoon.
I think some of my team are heading over.
they are waiting for the item to be called.
diane blankenship, director of human resources.
and this item was put on at the request of Commissioners Gomez and Davis to look at our leave policy in regards to would something else make sense when an employee has some type of catastrophic illness or injury.
currently as the backup states employees start out getting 12 days of vacation, 12 days of sick and three personal holidays per year.
the vacation goes up as the employee gets more service.
we also have the opportunity for employees to buy short-term disability and long-term disability at a fairly low rate, and with those policies short-term disability, if somewhere were to happen that were to last longer than 14 days, an illness, what would happen after 14 days they could get 60% of their income from the short-term disability.
there is a mistake on the backup with regards to long-term disability.
it states that long-term disabled has a 30 day waiting period.
it does not, it has 90 day waiting period.
it's meant to complement short term not take the place of it.
if somebody were to have an illness or injury that lasted longer than 90 days, if they had purchased long term they would get income replacement so they could return to work, their own occupation for a certain amount of time or to another occupation or until they reach age 65.
this might be generous benefits.
one-third of employees do not take disabled insurance.
sometimes they do that because they have a large bank of sick leave built up, sometimes it's the financial implication of having that deduction coming from their check and there's a lot of reasons.
they may not understand what the benefit is.
so we do have about one-third of employees that don't take any type of disability.
the Commissioners have asked us to look at do we need to provide some type of a safety net or look at situations where somebody has their own illness and maybe we need to be providing something else whether employee paid or employer paid.
we're asking the court to allow us to research different possibility and come back to the court.
and this backup, of course, also asks for an employee survey.
I would ask the court allow us to bring it to the benefits committee first so we can get the benefits committee to weigh in on any proposals we might have.
we might have several proposals that we would want the court to look at and I think the court would like to hear what the benefits committee says before we go directly to the employees.
insurance long short term, long term disability, employees get confused about that so I wanted to make sure we explain these to the employee before we survey them so they would understand what they are being surveyed about.
>> let me ask this question.
who -- is there a model that exists now of any governmental entity that actually has a situation where persons can donate sick leave to a pool for catastrophic-type situations?
there any evidence that we are aware of that somebody doing that now?
>> sick leave pools have been done in governmental agencies.
university of houston had a sick leave pool.
there are some administration issues with that and this is, again, I haven't researched it recently and one of the things we would want to do is come back to court what what people are doing now.
I know people looking at employee illnesses and the diagnosis and prognosis of employee illnesses, that could be a potential issue as far as with hipaa.
another issue is if we have people donating leave, that tends to require, and I think the auditor might need to speak on that, it might increase the amount of unfunded liability or we would have to fund that liability which could have implications on bond rating.
we would want to look at all those and bring it back to the court.
did you want to say something?
come on over.
>> we all know what I'm going to say.
if, in fact, we're going to give a benefit, we're booking that someplace.
so if -- I mean usually people are not giving their leave away unless they think they don't need it.
and a lot of those in organizations -- and we have looked at it numerous times as a group, not just our office, but when people are leaving and believe they are going to -- that help can't take with them and cash into money, that's the kind of thing they tend to donate and that's logical.
but those are things we would normally clear off our books.
and so we book compensated absences which is an actual budgeted entry on how much leave we've got out there that we think we're going to have it's actually a budget item.
y'all don't vote on it because we calculate what it is and do adjustments at year end.
and if you look at the cafer you will see that.
it does in fact cost money.
it's not free.
that doesn't mean you don't want to do it anyway, but it's not -- it's not free.
to do that.
>> so we would want to bring all that information back to the court and explore -- if this is something providing a safety net that's important to the court, I think we could bring multiple options back to the court.
and susan is quite right, typically when people donate it is when they are leaving and it's whatever is not vested they donate to the leave bank.
so that would be things that you aren't paying and then you would at that point have to pay.
it would acquire value.
there's also a concern that I have that if we had such a sick leave bank, what we would see is some people, probably quite a few people, dropping off of their paid short term disability or their paid long term disability hoping that a bank would be their safety net as opposed to them paying for short or long term disabling.
that could be at implications there would be a bigger drain on that than we anticipated.
so those are things I think we need to flush out and bring back to you with your vote to do that.
>> you did indicate that you would recommend that this go before the benefits committee.
if it does go before the benefit committee, then, of course, to look at this, then we proceed from there.
I guess my question is this.
if the court decides to follow your direction and go before the benefits committee, how long would it take before it would come back for us to move somewhere down the road one way or the other?
>> that's a good question.
I would say at least a couple months for us to put together and really cost things out and bring the committee together and make sure they understood what -- these are complicated because all these leave issues are complicated issues and they all work together.
I would say say at least a couple months, maybe three months.
>> because I know we've had employees that have run into catastrophic situations which, you know, there have been examples, I don't want to go into the particulars or specifics, but somewhere between short and long term there's a gap and then sometime even beyond that point and then the percentage, of course, of income is reduced anyway.
but I guess like I said, you've talked about other models that exist somewhere in governmental entities that are doing this and I would like to maybe make sure that whatever they are doing is allowable there and what -- you know, what factors are involved in them allowing this to happen I think is something we need to probably look at.
so but again, I'm listening to what you are saying as far as the benefits committee to fairly flush it out and, of course, hopefully come back and allow to us see what's there.
>> there's as many organizations as there are, there's multitude of ways this is dealt with.
at municipal community college, for example, purchases long term disability and let the employees decide if they want short term or live and die on sick leave.
it just depends on the organization and how all of their leave benefits are structured.
it's not just a matter of short term, long term, catastrophic leave, what you are giving for vacation, holidays, sick leave, do you do pto instead.
it all goes in together so I think it's important to look how it works together to make sure we're providing that safety net but not having overlap that we don't want to have.
there is some issue right now with those people that are going out on disability and they've paid for disability but they are also getting sick leave at the same time.
so in effect they are getting 160% of their salary because they are using their sick leave and getting disability that they paid for.
you know, so -- but do we want to have that overlap.
that's a good question.
so I think we can bring a lot of possible scenarios back including the status yes and what does that mean.
>> okay.
>> miss wilson.
>> the court probably -- some of the court probably remembers, but for those of you who don't, there is a provision in the law that allows a county to establish a catastrophic sick leave pool.
it happened about halfway through my tenure with the county so that probably means early 90s.
but that provision does have limits in it as to what can be donated to the pool.
it has been long enough ago since I looked at it that I can't just flip them off my head, but it was something like two or three days per year and only if you had a certain amount of sick leave in your account could you, and there would be no ability when you were terminating to transfer huge bulks because your two or three day ayear still applies.
now, people who have four or five, six months worth of sick leave built up don't have the incentive to keep any of the new sick leave they are earning and so you would see some increased liability there because they would be more inclined to give it away rather than have it go to no good purpose and just --
>> no good purpose -- I mean I planted the idea of no good purpose because sick time is not compensation.
sick time is so that if you are sick, you -- you know, you can continue to be paid.
so that if you don't get sick, both the county gets a dividend in not having to pay that out because we have a healthy employee and the employee gets the benefit of not having been sick.
so I am a little concerned -- I think we should definitely have this conversation.
I think that it's important to have the conversation in full knowledge that sick leave is not compensation.
sick leave is pay for when you are ill so that you can come back healthy and keep working with the county.
>> I remember that we did have the -- barbara, that we did have this discussion some years back.
I just didn't recall all of the details of it, but I think didn't it go through the benefits committee the last time we looked at this?
>> actually no because at the time that this was being explored in depth, there was a sort of grass roots movement and a lot of people on that committee -- which was a catastrophic sick leave pool committee, were people who had acquired a lot of sick leave themselves and would have liked to have helped co-workers who were newer at the county out with a little extra time.
seemed like at that point I kept hearing about an awful lot of people who were experiencing that nasty cancer in their lives and it was having very bad effects and it seemed to come up over and over again that people had a great deal of compassion for -- and I hope the reason we haven't heard about it is because fewer people are getting cancer.
that will be a lovely event if that were the case.
I just haven't been hearing as much.
but at the time that that was done, there really wasn't as active or an active benefits committee like there is today and I think it kind of pre-dated benefits, but it did -- it was very much employee interest that brought it forward.
>> I recall, it must have been a while back.
it had to be.
I don't recall it at all.
maybe before I got here.
>> I was going to say it may have been before you got here.
>> may I state that in my year and month or two of being here, it's come up five or six times.
and it's come up because somebody is about pay.
so whether they are without pay because they exhausted their sick leave, they had a huge bank, they exhausted it, something bad happened or because they just didn't have the money to take std it has come up.
it's probably a good idea to have a discussion and say is the status quo what when he need, do we need to augment that, something that would provide a safety net for our workforce.
it's something worth looking at because I've been surprised how much it's come up in the last year.
>> there's definitely a desire to be compassionate among the employees to their fellow employees.
>> Commissioner Gomez, when I first came we had long term disability and no short term and we had a catastrophic, like a temporary catastrophic leave policy that we were basically kind of administering through h.r.
and the court made a decision at that time to discontinue the catastrophic leave policy and to go with the 100% employee paid short term disability.
for one reason is we wouldn't be the ones administering it and trying to make the decision who gets this and what based on this diagnosis and that diagnosis.
we have a professional company administer it.
and it was thought that if employees wanted the coverage, then they could purchase it.
we would make it available.
and if they wanted that level of coverage, then it would be up to the employee to purchase it.
that's where the thought process was at the time we went with short-term disability.
>> thanks for the reminder.
>> the hipaa issue with the health care reform, the hipaa fines have gone up to tens of thousands of dollars for each occurrence.
so there
>> [indiscernible] by having an employee committee that would be reviewing people's health issues and if there was a leak from that committee, there's certainly a concern about that was the implication would be to the county or the person on the committee personally.
>> will you all also be -- I see it mentioned in the backup, the tax consequences with regard to the sick pool and I wonder about -- I don't know if we can answer this because it's so in flux, about whether or not there are any tax implications in evaluation of our benefits package under the new health care law.
I do know that we did have some concerns as to whether we would be designated one of those benefits packages for which our employees would be taxed.
>> I think that remains to be seen.
as we get closer to 2013, whether the whole cadillac plan and that sort of thing, that's going to fall out on that.
>> that doesn't go into effect until 2018 the cadillac plan.
it wouldn't be the employees that got taxed, it would be the county, 40% excise tax.
so we will be continue to go watch that.
>> there is one important tax consequence on disability.
if we made it an employer paid product, then the benefit would be taxable.
right now it's 100% voluntary, it's being paid for with after tax dollars so the benefit is not taxed so when they are using the benefit and get that short term disability or long term disability money it's not taxable because they are paying up front with after tax dollars.
if it became a county offered product where the county was paying for it, that benefit would be taxable.
>> it would be if we did that, however, if we did a catastrophic leave event all of that would be taxable.
>> so the law defines catastrophic I will sentences.
>> that's part of the issue with the committee.
and if the bank ran dry and we have quite a people not taking std because they thought they had a bank and the bank ran dry, what would we do at that point.
all of those need to be flushed out.
some scenarios, if something happened to this employee, several scenarios.
>> would the study contain efforts to quantify the problem?
>> I think so, yes.
I think just the facts and figures, how many hours of vacation, sick, absolutely.
>> miss wilson.
>> you might also want to consider age in that because maybe it's an unfair thing to say, but I've always had the prejudice that the younger you were, the less likely you were to get catastrophicly ill.
and so I would think as a younger person I would have been less inclined to take short-term disability than as an older person.
and, you know, I don't know whether -- but some consideration of that.
>> it's worth looking at.
anecdotally what we are hear is people with a lot of leave put together, they have a lot of sick leave, then they opt out because they have a lot of leave.
the problem is that if they have something happen and they exhaust that leave, great news on the next open enrollment you can get std and ltd but there's a 12 month waiting period.
if you have a recurrence of the cancer, it's not going to pay.
you have to vaccinate 12 months before it's in full effect.
>> do we make an effort to determine how many of the employees would like to see catastrophic illness plan, I guess, really cannot afford short-term disability?
>> we can take a look at that.
>> I believe we ought to.
>> there's another option too which would be employer sponsored, employer paid for short-term disability and that means 100% of the people would be covered.
it would lower the cost of short-term disability, but it would mean the county would pay for it.
we can bring a lot of options back to you.
>> either Davis or Gomez moves approval and either Davis or Gomez seconds the motion.
>> move approval.
>> second.
>> discussion on the motion?
all in favor?
that passes by unanimous vote.
>> thank you all.
>> thank you.
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