Category: Bureau of Finance and Management

Recommended Increases                           General Federal      Federal           Other

3% Across the Board and

Market Increases                                          $9,772,471         $5,442,344   $11,678,982

3% Adjustment Toward Job Worth (PACE)      $2,797,040         $1,346,040    $1,828,3780

4.5% Pay for Performance (Career Bands)       $585,673              $544,366    $1,587,957

Targeted Compensation Adjustments               $454,727             $224,340      $304,730

Employee Health Insurance Increase              $6,756,462          $3,902,062    $7,286,652

Total Cost of Recommendation                      $20,366,373        $11,459,152   $22,686,699

Remaining FY2014 Compensation Pool           $(32,711)             $(190,766)     $(464,725)

Total Increase for Compensation Plan             $20,333,662        $11,268,386   $22,221,974

So we see that the proposed salary policy leads to a raise in compensation across the spectrum. But the Friday BHR-centered hearing showed that raises in compensation may have been proposed, but so have increases in deductible and out-of-pocket costs for the employee and dependents. That proposal would see families paying prohibitively more for health care. The slides used are here.

Under the BHR proposal, deductibles would rise from a low of $500 to $750, and from $1,000 to $1,250 (no change on $1,800 HSA). And out-of-pocket costs would rise from $2,500 to $3,250, from $3,500 to $4,250, and from $3,600 to $4,350. In addition, higher prescription drug costs, the halving of the retirement subsidy, and the elimination of the COBRA subsidy were offered. Altogether, it totals $5.8 million, and that's all born by the employees, straight out of their pockets. That's a problem.

The worst of it is, though, that these costs would disproportionately affect the lowest paid workers. I think of the families that really comprise the backbone of South Dakota, those helmed by heads of household earning less than $40,000 per year. I'd say most of those families have children, and you know how it is to be a parent: children regularly go to the doctor. Then I imagine having to pay an extra $250 per person for the deductible (so, at least an extra $750 to $1,000 per family), and $750 per person for the out-of-pocket (about $2,250 to $3,000 per family). That all adds up to an extra $3,000 to $4,000 per family per year. As far as family finances are concerned, that's a catastrophic health plan. And for families in the $20,000 to $60,000 range, it's just catastrophic.