The following is an email from Chief Financial Officer Farrell Hanzaker to all VBCPS staff detailing impending changes to your paycheck:
Colleagues,
It is likely that many of you followed the news regarding Congress’ work to avoid the fiscal cliff, which would have resulted had tax cuts put in place by former President George W. Bush been allowed to expire. Many of us may have breathed a sigh of relief on Tuesday, January 1, when Congress passed the American Taxpayer Relief Act, H. R. 8. This legislation extended most of the Bush-era tax cuts and extended many other lapsed tax provisions.
However, there was one provision that was not addressed in the act — extension of the 4.2 percent rate for employees’ portion of the Social Security payroll tax. Congress’ inaction on this front means that the rate reverts to the prior rate in place before the Bush-era change. That rate is 6.2 percent. Consequently, effective your next paycheck you will experience a reduction in your net take home pay, the result of that 2% increase in your social security tax.
Many of you had probably determined this would be the case when you followed the news reports. However, we felt it important to remind you.
Sincerely,
Farrell Hanzaker
Chief Financial Officer
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I was stunned to see that my health care premium had jumped from $10 a month to over $100 a month. What is the justification for such a huge increase? Even with the $500 credit for my “excellent” health standing, I am making far less each month than I made a few years ago. I don’t know of any other large companies that had a ten-fold heath care premium increase for single subscribers. I didn’t see the “family” plan for my colleagues increase ten-fold so why the discrimination against the “singlets?” The Family Plan appears to have increased from about $600.90 per month to $688.60 a significantly smaller “increase.” Why didn’t it also increase ten-fold? It really is shocking that VBCPS can’t be more fair and consistent than this! I’m not even worried about the Social Security payroll tax increase compared to the health care premiums!
Thank you for your inquiry regarding the health care premiums for 2013. The City/Schools did not raise health insurance premiums for four years, from 2008 through 2012, with the exception of the single subscribers in 2009, when it increased from $0 to $10 per month. During these years, health care costs increased year-over-year ranging from 4% to 9%; however, these increases were not passed along to the employee. There were also no plan design changes since 2009 that would have increased out-of-pocket health care expenses for the employee.
For 2013, the City/Schools updated the rates to reflect the true cost of coverage. In 2013, the City/Schools also changed the method in which they provided an employer contribution towards health care, contributing 90% of the employee costs and 50% of the dependents costs. The need to increase rates and the explanation of the increases were provided at the Open Forum meetings in March 2012 with the launch of the new VBWellnessforLife program, and again in the April Benefits e-Bulletin. The annual cost for a single subscriber is greater than $5,300, and the cost to the employee, if receiving the VBWellnessforLife credit, is $538.40.
If you have additional questions or concerns, please contact Linda Matkins in the Consolidated Benefits Office at 263-1060.
I think it’s cool that the teachers question was answered. Good job.
I can understand the need to raise premiums due to the high cost of health care, what I don’t fully understand is why they raised our premiums ten-fold and handed the money over to a 3rd party company (ie: Healthy Roads) to give us “coaching” over the phone. This is why we pay our doctors. It’s an uneeded hassle and one more thing to take time out of our already busy days.