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State Employees Association Legislative report The Legislature adjourned on Thursday, June 3 and returned in late June to consider a limited range of legislative matters such as conference reports and vetoes. This report summarizes provisions in the budget bill as well as other legislation that affects state employees and retirees.  State Employee Pay  The House of Representatives endorsed the pay proposal that the Senate approved in its budget recommendations. Classified state employees will  receive a 3 percent cost-of-living increase effective July 1; and, further be eligible for an average 1 percent merit increase on their performance review dates.  Unclassified state employees are eligible for pay increases to average 4 percent with these increases effective Oct. 1. Approximately $54,000,000 was included in the 1999-2000 fiscal year budget bill to fund these pay increases. State Retirees  State retirees will receive a cost-of-living increase of 1.6 percent effective July 1. This increase equals the inflation rate of the previous calendar year which fulfills the legislation that provides retirees their cost-of-living raise. Retirees who return to work for an employer that participates in the State Retirement System may earn up to $25,000 during fiscal year 1999-2000 without affecting their state retirement benefits. Employer Match for Deferred Compensation  In his budget proposals to the legislature, Governor Jim Hodges recommended that the state con- tribute up to $300 per year to employee's deferred  compensation accounts. The House and Senate ap- proved this new initiative during their budget work. The effective date for this benefit for all permanent full-time employees will be after July 1 as certain administrative procedures need to be developed along with the exact funding requirement. The legislature determined that employees who earn less than $20,000 will receive the employer match regardless of their level of participation; and, employees must have 24 months of service to receive the match. Health Insurance: Employees and Retirees  Nearly $12,000,000 was included in the 1999-2000 budget bill for the health insurance program for state employees and retirees. These funds will continue the current level of premiums and benefits of the program. Calendar year 2000 will bring a change in the Health Insurance Program in terms of the purchase of prescription medicine.  The Budget and Control Board approved a prescription medicine purchase plan with members paying not more than $5 for generic prescriptions, and $20 for brand name prescriptions.  If the cost of the prescription is less than the $5 or $20 amounts, the insured pays the lesser amount. Members of the health plan would pay no more than $1,500 in a calendar year for prescription medicine. Pharmacies would file directly to the health insurance fund for the balance due above the copay amount.  This change will be effective Jan. 1, 2000; and, replace the current system of reimbursement for prescription medicine of 80 percent or 85 percent reimbursement after satisfaction of the deductible. Mileage Reimbursement  The mileage reimbursement rate will automatically reflect the amount authorized by the Internal Revenue Service under a provision in the 1999-2000  budget bill.  During the past two fiscal years, the state has reimbursed employees at the IRS allowed rate by stating specifically the cents per mile rate. This new provision directs the state to follow the IRS allowance in an automatic manner. General  Under an expanded definition of immediate family, state employees may now use up to eight days of their sick leave to care for their, or their spouse's, brothers, sisters, or grandparents.  As this coming Christmas and New Year's do not fall conveniently within the current holiday guidelines, the legislature authorized special arrangements to insure state employees receive full benefit of these holidays.