Introduction
This Interim Report presents the findings and recommendations, to date, of the Wage and Fringe Benefits Work Group's review of direct service worker wage and fringe benefit issues that are a fundamental element of rate-setting for developmental disability services.
The Statewide Advisory Council Rate Committee's ongoing review of rate methodologies for funding developmental disability services led to the realization among several of the separate workgroups that an analysis focused on personnel wages and fringe benefits was needed. The Rate Committee convened the Wage and Fringe Benefit Work Group to provide a focused review of wage and fringe benefits that are central to setting the rates for Community Integrated Living Arrangements (CILA) and other existing services that are based on worker wage factors and that would also likely have application in any new rate methodologies that featured a standardized approach to staff funding. Defining or establishing a funding level wage standard is essential to the capability to evaluate the degree to which current rate methodology funding levels meet that standard.
The Wage and Fringe Benefits Work Group believes that service quality depends foremost on having quality staff and that adequate wages and fringe benefits for direct service staff are critical factors in providers' abilities to attract, hire, and reduce turnover of quality workers. Providers need to be competitive in their labor market to ensure that they will have a sufficient number of workers to provide services and to avoid having to use overtime, which is both costly and can lead to worker burnout. Turnover and its causes, including wages and fringe benefits, have been amply documented elsewhere (e.g., see the Quality Support 2005 (Work Force Development) Paper supported by funding from the Illinois Council on Developmental Disabilities).
Wages and the associated costs of mandatory payroll taxes and non-mandatory fringe benefits are the largest portions of the costs of providing services for individuals with a developmental disability. Illinois cost report data for 2007 reflects that wages alone account for approximately 69% of agencies' reported costs of operations and that 85% of all wages are programmatic employee wages. Similar results were among the findings of two independent cost studies conducted in 2005-2006 on 2004 costs (Powers et al and PNP/Navigant Reports).
Background and Findings
The SAC Rate Committee set three tasks for the Wage and Fringe Benefit Work Group in conducting its review of the staffing related elements in rate methodologies:
- the identification and review of job classifications used in various rate methodologies
- the identification of reliable, public and published sources of information for wage data that are descriptively comparable to the methodological job classifications
- the identification of reliable, public and published sources of data regarding employer-paid payroll-related mandatory costs including FICA (Federal Insurance Contribution Act) that support Social Security and Medicare, State and Federal Unemployment Taxes, and Worker's Compensation insurance/claims and the identification of reliable, public and published sources of data regarding non-mandatory employer-paid costs such as paid and shared health insurance, maternity and paternity leave, dental insurance, life insurance, other insurance, and retirement.
Task 1. Worker Classifications In Rate Methodologies
Many working job titles are used for workers in developmental disability services and duties may vary widely among agencies for job titles that are the same. In addition, in particular settings there are certain required personnel types specifically distinguished, including Child Care Aide, Habilitation Aide, or Developmental Disabilities Aide and these are approximate equivalents to what is commonly termed the Direct Support Person, Personnel or Professional (DSP). Also, some developmental disability (DD) programs are funded so that workers can be hired at an agreed wage determined by the individual and/or their family. The following discussion is not intended to provide information on all functions, services, or programs utilized in the DD Service System. It does not presently address the roles of counselors, therapists, behavior analysts, for example, among others.
In the DD Service System, there are several types, or job classifications, that are distinctly identified as the key staff providers of direct service in certain rate methodologies, e.g., CILA. Yet despite their common usage, there are little or no written definitions for most positions as discussed below. See also the discussion for Task 2 for further information. The job classifications that are discussed in this report include:
- DSP - Direct Service Person/Personnel/Professional (also called Direct Service Worker. DSP is somewhat comparable to habilitation aide, developmental disability aide, child care aide and, to some extent, nurse aide job classifications used in licensed long term care and children's settings)
- QSP - Qualified Support Professional (formerly known as Qualified Mental Retardation Professional or QMRP, this job title is changing)
- Supervisor (of DSPs)
- Registered Nurse
- Licensed Practical Nurse
- Driver (in day programs)
A description and discussion of the job duties for each of these follows:
DSP - Direct Service/Support Personnel (also called Direct Service Professional or Direct Service Worker)
Illinois has no "official" definition for "DSP." Often this term is used interchangeably with Habilitation Aide, Developmental Disability Aide, or Certified Nursing Assistant (CNA), and, less often, with Child Care Aide.
The Resource Toolkit from the University of Minnesota agrees with the Direct Support Professional definition of the Quality Support 2005 (Workforce Development) Paper supported by the Illinois Council on Developmental Disabilities, "DSPs assist people with disabilities with activities of daily living, social activities, personal contacts, coordination of health care, community interactions and more. The support they provide depends upon the situation of each person and can encompass a wide range of possible activities such as helping maintain a home, meeting friends, finding work, providing transportation, making important decisions, taking medications, learning new skills, paying bills, getting a job and/or providing physical assistance. DSPs also facilitate connections to the people, resources and experiences necessary for individuals to live fully and safely in their neighborhoods and communities. The quality of support individuals with disabilities receive from DSPs has a profound effect on the quality of their daily lives. Different terms and titles are used for people who do such work, including "personal care attendant" or "direct care worker."
The Paraprofessional Healthcare Institute (PHI) affiliate the National Clearinghouse on the Direct Care Workforce has produced the "State Chartbook on Wages for Personal and Home Care Aides" comparing direct care worker wages among states. It should be noted that the Clearinghouse distinguishes personal and home care aides from Certified Nursing Assistants (CNAs) or home health aides and is not reporting data on these latter two occupational groups.
The Clearinghouse describes personal and home care aide's duties as, "…may work in an individual consumer's home or a group setting. They have many titles, including personal care attendant, personal assistant, and direct support professional (the latter work with people with intellectual and developmental disabilities). In addition to providing assistance with ADLs, these aides often provide assistance with clinical tasks, housekeeping chores, and meal preparation. They also help individuals go to work and remain engaged in their communities. A growing number of personal assistance workers are employed and supervised directly by consumers rather than working for an agency." (See Chartbook published in July 2008 compares data 1999-2006 and is available online.). The Technical Notes from the Chartbook present data from Occupational Employment Statistics (OES) Program of the U.S. Department of Labor (DOL), Bureau of Labor Statistics (BLS), citing the BLS Standard Occupational Code (SOC) 39-9021 Personal and Home Care Aides as the data source. The BLS defines Personal and Home Care Aides as follows: "Assist elderly or disabled adults with daily living activities at the person's home or in a daytime non-residential facility. Duties performed at a place of residence may include keeping house (making beds, doing laundry, washing dishes) and preparing meals. May provide meals and supervised activities at non-residential care facilities. May advise families, the elderly, and disabled on such things as nutrition, cleanliness, and household utilities."
Provider members of the Wage and Fringe Benefits Work Group have suggested that this latter definition is limited and not reflective of the full range of service demands and expectations for meeting needs of individuals. Dorie Seavey, Ph.D., the PHI Director of Policy Research wrote in July 2008 to the Standard Occupational Classification Policy Committee (SOCPC) regarding its deliberations of SOC changes for 2010. She argued that a change in the description of personal and home care aides is needed to reflect a broader range of tasks actually performed by Personal and Home Care Aides and that changes in data collection were needed to better capture the employment statistics of this group, including the fact that greater numbers of these direct care workers are often not working for agencies but directly for the consumer and consumer families, or are working in community-based settings aside from long term care.
Although the PHI suggestions have merit, the SOC system and underlying statistical framework appear to be in flux through the auspices of the Standard Occupational Classification Policy Committee (SOCPC).
Members of the Wage and Fringe Work Group have also argued that the Personal and Home Care Aide classification imparts a greater emphasis on health and healthcare aspects than is actually reflective of the work being done by DSPs. The suggestion has been made to consider the definition of the BLS SOC Major Group, "Community and Social Services Occupations" and specifically that of the Social and Human Service Assistants category 21-1093 which BLS defines as follows: "Assist professionals from a wide variety of fields, such as psychology, rehabilitation, or social work, to provide client services, as well as support for families. May assist clients in identifying available benefits and social and community services and help clients obtain them. May assist social workers with developing, organizing, and conducting programs to prevent and resolve problems relevant to substance abuse, human relationships, rehabilitation, or adult daycare. Exclude "Rehabilitation Counselors" (21-1015), "Personal and Home Care Aides" (39-9021), "Eligibility Interviewers, Government Programs" (43-4061), and "Psychiatric Technicians" (29-2053)."
Indeed, Census Bureau classifications cross-walked to this SOC category include such occupations as human services worker, community service worker, group worker, human service technician, human services assistant, social services assistant, and social service worker along with a number of aide-related positions such as welfare aide, children's aide, clinical social work aide, family service aide, and service aide.
QSP - Qualified Support Professional (also Qualified Developmental Disability Professional). As with the DSP, the QSP is also not "officially" defined in Illinois. The QSP/QMRP qualifications have long been stipulated in the Code of Federal Regulations (42 CFR 483.430) but definition and duties are illustrated only in the State Operations Manual, Appendix J, which provides ICF/MR surveyors with interpretive guidance. Similarly, Illinois' CILA Rule (89 IAC 115) stipulates the same qualifications of the QSP/QMRP and in regard to the Community Support Team requirement found in Rule 115.220, the QSP/QMRP's duties are described to include:
- Convene the CST to revise the services plan as part of the interdisciplinary process
- Assure that the services specified in the services plan are being provided
- Assure the participation of team members and necessary non-team member professionals
- Assure and document in the individual's record, at least quarterly, that the individual's residence meets environmental standards
- Identify and address gaps in the service provision
- Monitor the individual's status in relation to the services plan
- Advocate for the individual's rights and services
- Facilitate individual linkage and transfer
- Provide for a written record of team meetings within 30 days after each team meeting
- Assure that information specified by the services plan is included in the individual's record
- Initiate and coordinate the interdisciplinary process as often as specified in the services plan or when required by problems or changes
- Assure availability of a written services plan to all team members
- Work with the individual and parents and guardians to convene special meetings of the CST when there are issues that need to be addressed as brought to the attention of the team by the individual, parents and guardians.
Although there are many BLS SOC job classifications that could match a specific QSP credential. Among the qualifying credentials for QSP are: nurse, physician, psychologist, occupational therapist, physical therapist, counselor, or social worker. Each of these have distinct BLS SOC classifications but the use of multiple series or attempting to use a weighted multiple series approach, are impractical.
The Work Group recommends the use of the BLS SOC major series 21-0000 Community and Social Service Occupations, which includes the following minor series and their sub-groups: 21-1010 counselors; 21-1020 social workers, and 21-1099 Miscellaneous Community and Social Service Specialists to associate with the QSPs workers. This series also includes the series recommended for DSPs and includes:
- Substance Abuse and Behavioral Disorder Counselors
- Educational, Vocational, and School Counselors
- Marriage and Family Therapists
- Mental Health Counselors; Rehabilitation Counselors
- Counselors, All Other
- Child, Family, and School Social Workers
- Medical and Public Health Social Workers
- Mental Health and Substance Abuse Social Workers
- Social Workers, All Other
- Health Educators
- Probation Officers and Correctional Treatment Specialists
- Social and Human Service Assistants; and Community and Social Service Specialists, All Other.
Supervisor (of DSP) - This lead worker or supervisor position may also function as "house manager" in CILA. In the CILA rate model, the supervisor position wage is priced above the DSP but below the QSP wage. The BLS SOC Major Group listings for "Community and Social Services Occupations" do not provide any further detailed descriptions for this category. The Work Group members have suggested SOC category 21-1099 "Community and Social Services Specialist Occupations, Other" as a reasonable candidate for the supervisor job classification since the hourly wage of this series is above the BLS series recommended as a DSP series and the hourly wage is below that of the BLS series recommended for QSP.
- Registered Nurse - This credentialed position has been linked to the BLS wage series for Registered Nurses in the Report of the Community Integrated Living Arrangement Nursing Services Reimbursement Work Group, January 2006.
- Licensed Practical Nurse - This credentialed position has been linked to the BLS wage series for Licensed Practical Nurses in the Report of the Community Integrated Living Arrangement Nursing Services Reimbursement Work Group, January 2006.
- Driver - The Transportation Rate Work Group discussions of the role of transportation to and from day programs has examined the vehicle driver function. After reviewing the duties of Drivers in Day Programs, the Workgroup has concluded that the driver is rarely, if ever, a full-time dedicated function. Drivers are DSP-trained and typically will work in the day program as a DSP when not driving. The Workgroup believes the same BLS wage classification for DSP is also appropriate for Drivers.
Task 2. The identification of sources of information for wage data descriptively comparable to the methodological job classifications
Cost Report Data
When the CILA rate methodology was initially developed, wage information was derived from cost report information provided on the Interagency Statistical and Financial Report (ISFR). The results of these analyses are no longer available but it is understood that the agency level data for selected cost report direct service categories were utilized and outliers greater or less than two standard deviations were eliminated before the average wage was determined. Since then, the initial wages have been updated for cost of living allowances when granted to the Division.
The FY99 Consolidated Financial Report (CFR) wage data was analyzed in 2001. The results essentially confirmed that the reported statewide weighted average wage (after eliminating outliers) was less than the then current wage values in use in the CILA rate model. For example, the DSP model wage without fringe benefits was $8.70 compared to the habilitation aide reported wage of $8.54. The CILA model QSP wage was $12.69 compared to the $8.84 reported wage. It should be noted that the cost report also includes the job title of "habilitation professional" which is defined as workers not classified elsewhere who are credentialed (licensed, registered, certified) or whose responsibilities are direct service supervisory and which yielded a reported wage of $12.06 compared to the CILA model wage for supervisor at $11.13.
Wage data from the 2007 (most recently available) cost report have been analyzed and subjected to the same elimination of two standard deviation outliers. The FY2007 reported Habilitation Aide wage is $10.41, the QSP is $18.28, and the Habilitation Professional wage is $15.49. These are compared, respectively, to the CILA model wages for 2007 of $10.71, $15.11, and $13.40.
Although cost report data is often criticized as reflecting only what agencies can afford to pay, perhaps it could be said that agencies make choices about wages they can actually pay in order to be competitive in the local market and to resist staff turnover. The cost reported data for QSP and the habilitation professional appear to indicate that these wages paid by providers now exceed the CILA model and make a good argument for identifying some other standard that could be used as a proxy for wages to be used in the CILA model in the future.
Department of Labor Bureau of Labor Statistics (BLS)
As was previously mentioned, the use of BLS wage survey data for certain wage series may provide a reliable, public, independent, and published source of representative information to defining or establishing a funding level standard and in determining the degree to which current rate methodology funding levels do or do not meet that standard as prelude to establishing recommendations or strategies for achieving change.
The BLS Occupational Employment Survey Program collects information on literally hundreds of job titles following the Standard Occupational Classification methodology and reports these data periodically. Hourly wage data reflect the hourly straight-time rate, or, for workers not paid on an hourly basis, straight-time earnings divided by corresponding hours. Straight-time wage and salary rates are total earnings before payroll deductions and include production bonuses, incentive earnings, commission payments and cost-of-living adjustments, although the prevalence of these among social service agencies is not anticipated to be significant. Not included in straight-time earnings are non-production (e.g., end of year) bonuses, shift differentials, and premium pay for overtime, weekend, or holiday work.
The Work Group's review of job classifications in Task 1 has led to the conclusion that BLS SOC Major Group, 21-0000 "Community and Social Services Occupations" could provide the wage standard the Work Group sought. Specifically, the Work Group is recommending the "Social and Human Service Assistants" category 21-1093 for the DSP hourly wage, the SOC category 21-1099 "Community and Social Services Specialist Occupations, Other" for the Supervisor positions, and the Major Group, 21-0000 "Community and Social Services Occupations" for the QSP positions. The table below reflects statistical information for these BLS categories.
Community and Social Services Occupations
| Occupation (SOC Code) |
Hourly
Mean
Wage |
Annual
Mean
Wage (2) |
Wage %
Relative
Standard
Error (3) |
Hourly
Median
Wage |
Hourly
75th
Percentile
Wage |
Hourly
90th
Percentile
Wage |
| Community and Social Services Occupations (210000) |
21.09 |
43860 |
1.8 |
18.65 |
26.77 |
35.39 |
| Social and Human Service Assistants ( 211093) |
13.77 |
28650 |
1.6 |
13.2 |
16.52 |
19.94 |
| Community and Social Service Specialists, All Other (211099) |
17.73 |
36870 |
2.7 |
15.67 |
20.68 |
30.33 |
(2) Annual wages have been calculated by multiplying the hourly mean wage by 2,080 hours; where an hourly mean wage is not published, the annual wage has been directly calculated from the reported survey data.
(3) The relative standard error (RSE) is a measure of the reliabiilty of a survey statistic. The smaller the relative standard error, the more precise the estimate.
Source for SOC Code: Standard Occupational Classification Code. Data extracted on December 1, 2008.
Some element of these figures could be used as a proxy value, as has been suggested to use series 21-1093 as a "stand-in" for DSPs. There are several approaches that could be taken from this point. Assume for the moment that $13.77, the hourly mean wage as of May 2007 is selected. The first question that doubtlessly would be raised is what is the value today, i.e., in FY2009?
Data from BLS for the years 2000-2007 for the series 21-1093 is available as presented in the table below.
Note that BLS data for this series for 2004 was an unexplained anomaly and has been excluded here. Possible causes might include sampling or reporting error, though this is only conjecture.
| Year |
Total
Employees |
Employee
S.E.M. |
Hourly
Average |
Annual
Average |
Hourly
S.E.M. |
Hourly
Median |
| 2000 |
10,030 |
12.30 |
$10.42 |
$21,670 |
2.30 |
$9.98 |
| 2001 |
11,640 |
11.80 |
$11.59 |
$24,120 |
2.80 |
$10.82 |
| 2002 |
9,910 |
9.90 |
$11.78 |
$24,500 |
2.80 |
$10.81 |
| 2003 |
9,800 |
7.9 |
$11.83 |
$24,600 |
3.1 |
$10.70 |
| 2005 |
8,910 |
6.6 |
$12.37 |
$25,730 |
1.8 |
$11.32 |
| 2006 |
8,510 |
5.3 |
$13.15 |
$27,350 |
1.4 |
$12.55 |
| 2007 |
8,970 |
5.8 |
$13.77 |
$28,650 |
1.6 |
$13.20 |
| 2008 Proj. |
|
|
$14.10 |
|
|
$13.29 |
| 2009 Proj. |
|
|
$14.59 |
|
|
$13.77 |
| 2010 Proj. |
|
|
$15.08 |
|
|
$14.26 |
Based on these data and the projected values for 2008-2010, the current (2009) CILA DSP hourly wage without fringes of $10.71 is 73.4% of the $14.59 BLS series hourly wage. These data illustrate the potential for determining the trend-line of wages that could be used to establish this BLS wage series as an updated standard for each successive rate year and provide a target for strategic planning to narrow the distance between the CILA model wage and an adopted series standard, perhaps by an incremental approach over successive budget periods.
Similarly, BLS data series 21-1099 "Community and Social Services Specialist Occupations, Other" series as a proxy for Supervisors is presented in the table below.
Community and Social Service Specialists, All Other (21-1099) for 2004 to 2007
| Year |
Total
Employees |
Employee
S.E.M. |
Hourly
Average |
Annual
Average |
Hourly
S.E.M. |
Hourly
Median |
| 2004 |
3,740 |
6.7 |
$15.43 |
$32,100 |
3.5 |
$13.85 |
| 2005 |
4,410 |
7.8 |
$16.22 |
$33,730 |
3.1 |
$14.82 |
| 2006 |
5,320 |
8.8 |
$16.86 |
$35,070 |
3.0 |
$15.01 |
| 2007 |
4,920 |
11.9 |
$17.73 |
$36,870 |
2.7 |
$15.67 |
| 2008 Proj. |
|
|
$18.45 |
|
|
$16.25 |
| 2009 Proj. |
|
|
$19.20 |
|
|
$16.82 |
| 2010 Proj. |
|
|
$19.95 |
|
|
$17.38 |
Also similarly, the table below presents BLS data for the SOC Major Group, 21-0000 "Community and Social Services Occupations" series the Workgroup is recommending as a proxy for QSP positions.
Community and Social Services Occupations (21-0000) for 2000 to 2007
| Year |
Total
Employees |
Employee
S.E.M. |
Hourly
Average |
Annual
Average |
Hourly
S.E.M. |
Hourly
Median |
| 2000 |
67,950 |
7.4 |
$15.20 |
$31,620 |
2.10 |
$14.12 |
| 2001 |
70,750 |
4.90 |
$15.94 |
$33,160 |
2.80 |
$14.42 |
| 2002 |
65,350 |
5.50 |
$16.31 |
$33,930 |
2.20 |
$14.44 |
| 2003 |
65,220 |
3.2 |
$16.86 |
$35,060 |
2.2 |
$15.06 |
| 2004 |
64,520 |
2.8 |
$17.64 |
$36,690 |
2.1 |
$15.75 |
| 2005 |
65,600 |
2.8 |
$18.93 |
$39,380 |
2.2 |
$16.91 |
| 2006 |
66,650 |
1.8 |
$19.95 |
$41,500 |
2.0 |
$17.55 |
| 2007 |
68,240 |
2.2 |
$21.09 |
$43,860 |
1.8 |
$18.65 |
| 2008 Proj. |
|
|
$21.49 |
|
|
$18.83 |
| 2009 Proj. |
|
|
$22.32 |
|
|
$19.49 |
| 2010 Proj. |
|
|
$23.15 |
|
|
$20.15 |
Geographic distinctions have also been discussed by the Work Group. Providers compete for workers in a given labor market area. The current CILA rate methodology uses a single statewide wage factor in setting CILA rates. The rate methodology for Intermediate Care Facilities for developmentally disabled persons (ICFs/DD) employs a geographically adjusted statewide wage that was established in the late 1980's and last adjusted in the early 1990's. The table below provides an indication of the data that is available from BLS. At first glance, the wide variability in the number of employees does raise concerns that the data might not be stable enough to use as a geographic differential. It should be noted that this and other data series are available for other, historical periods and non-Metropolitan areas. More review, discussion, and research are needed.
| Geographic Area |
Total
Employees |
Hourly
Average |
Annual
Average |
Hourly
S.E.M. |
Hourly
Median |
| Champaign, Urbana (IL) |
80 |
$11.51 |
$23,940 |
7.8 |
$10.96 |
| Chicago, Naperville, Joliet (Metropolitan Division, IL) |
4,850 |
$14.48 |
$30,130 |
2.1 |
$13.88 |
| Chicago, Naperville, Joliet (IL, IN, WI) |
5,670 |
$14.69 |
$20,60 |
2 |
$13.95 |
| Danville (IL) |
Note (8) |
$14.08 |
$29,290 |
6.2 |
$12.80 |
| Davenport, Moline, Rock Island (IL, IA) |
290 |
$10.98 |
$22,840 |
6.1 |
$10.37 |
| Decatur (IL) |
40 |
$14.34 |
$29,830 |
5.4 |
$13.81 |
| Kankakee, Bradley (IL) |
130 |
$14.14 |
$29,410 |
5.5 |
$13.53 |
| Lake country, Kenosha (Metropolitan Division, IL, WI) |
460 |
$18.67 |
$38,830 |
7.1 |
$17.41 |
| Peoria (IL) |
480 |
$13.36 |
$27,790 |
4.2 |
$13.09 |
| Rockford (IL) |
400 |
$13.02 |
$27,080 |
6 |
$13.28 |
| St. Louis (IL, MO) |
1,200 |
$12.11 |
$25,190 |
3.5 |
$10.44 |
| Springfield (IL) |
130 |
$11.89 |
$24,730 |
4.9 |
$11.97 |
Northwestern Illinois
Metropolitan Area |
180 |
$13.21 |
$27,470 |
3 |
$13.40 |
| West Central Illinois Non-Metropolitan Area |
560 |
$13.73 |
$28,560 |
5.7 |
$13.64 |
East Central Illinois
Non-Metropolitan Area |
350 |
$10.08 |
$20,960 |
7.1 |
$8.86 |
Southern Illinois
Non-Metropolitan Area |
560 |
$11.27 |
$23,440 |
3.1 |
$10.64 |
(8) Estimate not released.
Notes:
- Estimates for detailed occupations do not sum to the totals because the totals include occupations not shown separately.
- Annual wages have been calculated by multiplying the hourly mean wage by 2.080 hours. Where an hourly mean wage is not publised, the annual wage has been directly calcualted form the reported survey data.
- The relative standard error (RSE) is a measure of the reliability of a survey statistic. The smaller the relative standard error, the more precise the estimate.
Task 3. The Identification of Sources of Data
Described as the identification of sources of data regarding employer-paid payroll-related mandatory costs including:
- FICA (Federal Insurance Contribution Act) that supports Social Security and Medicare, State and Federal Unemployment Taxes, and Worker's Compensation insurance and claims.
- Identification of reliable, public and published sources of data regarding non-mandatory employer-paid costs such as paid and shared health insurance, maternity and paternity leave, dental insurance, life insurance, other insurance, and retirement.
What are an employer's mandatory and non-mandatory responsibilities for fringe benefits? Employer-paid mandatory fringe benefits include:
- Social Security (FICA) Taxes 7.65% (6.2% for social security and 1.45% for Medicare)
- Unemployment Insurance - Employers must pay both a Federal and a State tax, though credit for State taxes is available. Tax varies depending on employer experience with federal taxes ranging 7.2%/0.8% maximum/minimum and effective 1/1/2008 FUTA is a flat 6%. The Illinois range is 1%-8.2%, new employers are required to pay 3.9%.
- Workers Compensation - This fringe benefit may be a tax or payment for work-related illness or injury may be covered by an allowable self-insured program. Costs vary - one provider reports 2.69% ($2.59/$100 of compensation) and depends on the Standard Industrial Classification (SIC) code (8864 classification is typical) and an experience modifier applies.
- Employer Paid and Shared Non-Mandatory Fringe Benefits include:
- Health Insurance
- Maternity and Paternity Leave
- Dental Insurance
- Life Insurance
- Other Insurance
- Retirement
For the Work Group, the task is to identify reliable sources of information regarding these costs in Illinois DD services.
Cost Report Information
FY 2007 CFR cost data were reviewed for another perspective on the issue of the percentage of fringe benefits. Reported Payroll Taxes and Employer-Paid Fringe Benefits as a percentage of All Wages was subjected to the 2 standard deviation test to eliminate outliers and the average was found to be 22.3%, with a range from 7.3% to 37.3%. The reservations of cost report data are noted again and the observation is also noted that agencies make choices about benefits they can actually pay in order to be competitive in the local market and to resist staff turnover. These data support the argument that these efforts are reflected in the higher fringe benefit costs in this analysis and that some providers are barely paying mandatory benefits.
Perhaps the only thing certain about employers' fringe benefit costs is the cost of FICA for Social Security and Medicare. All other costs depend either on the employer's "track record" for unemployment and on-the-job injuries/illnesses or on the employer's willingness and ability to pay for additional benefits for its workers.
BLS Information
The BLS Employer Costs for Employee Compensation data from the September 10, 2008 release of the BLS NEWS reflecting June 2008 data. The NEWS features a review of Employer Costs for Employee Compensation that provides a national and regional perspective to an Illinois issue of the cost of so-called "fringe benefits." BLS reports on Table 1, page 5, that nationally Total Compensation (wages, salaries, and benefits) for civilian workers averaged $28.48 per hour worked in June 2008. Of this total, 69.7% of these costs were in wages and salaries while benefits accounted for the remaining 30.3%. Benefits include retirement and savings; life, health, and disability insurance, legally required benefits (FICA, Medicare, unemployment, workers' compensation, and also paid leave (vacations, holidays, sick leave, and personal leave) and supplemental pay. Table 7, page 15 of the NEWS reflects data for the Midwest Division, North Central Region (IL, IN, MI, OH, and WI) as the data source for fringe benefit information.
As reported, paid leave and supplemental pay are included in these benefits. However, in the CILA rate methodology, as well as in other staffing model type rate-setting systems, paid time off is accommodated by factors that take into account a standard number of paid leave hours for employees and additional funding is included rather than using the fringe benefit calculation to account for this cost.
Supplemental pay includes overtime and premium pay for hours worked beyond or a standard work schedule such as weekends, holidays, shift differentials and bonuses. At this time the CILA rate methodology, as well as in other staffing model type rate-setting systems, uses a straight time hourly wage factor. The actual use of supplemental pay is a practice that is likely to vary considerably among provider agencies.
The table below presents the BLS fringe benefit information for the Midwest and Midwest East North Central census regions before and after making adjustments to exclude the paid time off and supplemental pay amounts. As shown, the average fringe benefit as a percentage of total compensation is 22.7% and as a percentage of wages the average is 29.43%, which would be used as a multiplier applied to the hourly wage factor in calculating a rate.
Employer Costs for Employee Compensation for Private Industry and Adjusted for Illinois CILA Rate Methodology and Determination of the Fringe Benefit Percentage as a Portion of Wages
|
Census Region and Division - Midwest |
Midwest Division - East North Central |
Adjusted for IL CILA Methodology -
Midwest |
Midwest
Division - East North Central |
Compensation
Component |
Cost |
Percent |
Cost |
Percent |
Cost |
Percent |
Cost |
Percent |
| Total Compensation |
$26.33 |
100.0% |
$27.34 |
100.0% |
$23.76 |
100.0% |
$24.63 |
100.0% |
| Wages and Salaries |
$18.40 |
69.9% |
$19.03 |
69.6% |
$18.40 |
77.4% |
$19.03 |
77.3% |
| Total Benefits |
$7.93 |
30.1% |
$8.32 |
30.4% |
$5.36 |
22.6% |
$5.60 |
22.7% |
| Paid Leave (vac, hol, sick, pers) |
$1.73 |
6.6% |
$1.80 |
6.6% |
NA |
NA |
NA |
NA |
| Supplemental Pay (OT, Shift, bonus) |
$0.84 |
3.2% |
$0.91 |
0.033 |
NA |
NA |
NA |
NA |
| Insurance |
$2.22 |
8.4% |
$2.33 |
8.5% |
$2.22 |
9.3% |
$2.33 |
9.5% |
| Life |
$0.05 |
0.2% |
$0.05 |
0.2% |
$0.05 |
0.2% |
$0.05 |
0.2% |
| Health |
$2.07 |
7.9% |
$2.17 |
7.9% |
$2.07 |
8.7% |
$2.17 |
8.8% |
| Short-term Disability |
$0.07 |
0.3% |
$0.08 |
0.3% |
$0.07 |
0.3% |
$0.08 |
0.3% |
| Long-term Disability |
$0.04 |
0.1% |
$0.04 |
0.1% |
$0.04 |
0.2% |
$0.04 |
0.2% |
| Retirement and Savings |
$0.96 |
3.6% |
$1.02 |
3.7% |
$0.96 |
4.0% |
$1.02 |
4.1% |
| Legally Required Benefits |
$2.18 |
8.3% |
$2.25 |
8.2% |
$2.18 |
9.2% |
$2.25 |
9.1% |
| Social Security and Medicare |
$1.55 |
5.9% |
$1.60 |
5.9% |
$1.55 |
6.5% |
$1.60 |
6.5% |
| Social Security |
$1.25 |
4.7% |
$1.29 |
4.7% |
$1.25 |
5.3% |
$1.29 |
5.2% |
| Medicare |
$0.30 |
1.2% |
$0.31 |
1.2% |
$0.30 |
1.3% |
$0.31 |
1.3% |
| Federal Unemployment Insurance |
$0.03 |
0.1% |
$0.03 |
0.1% |
$0.03 |
0.1% |
$0.03 |
0.1% |
| State Unemployment Insurance |
$0.16 |
0.6% |
$0.17 |
0.6% |
$0.16 |
0.7% |
$0.17 |
0.7% |
| Workers' Compensation |
$0.44 |
1.7% |
$0.45 |
1.6% |
$0.44 |
1.9% |
$0.45 |
1.8% |
| Total |
$26.33 |
100.0% |
$27.34 |
99.9% |
$23.76 |
100.0% |
$24.63 |
100.0% |
| Total Benefits as a % of Wages |
43.098% |
|
43.720% |
|
29.130% |
|
29.427% |
|
Overall Recommendation
Overall, the members of the Statewide Advisory Council Rate Committee Wage and Fringe Benefit Work Group recommends the use of Bureau of Labor Statistics wage and fringe benefit data in rate-setting methodologies to support and enhance quality services in Illinois by providing funding at levels that will facilitate attracting and retaining workers, reducing turnover, and developing the supply of workers. The Workgroup recommends the use of BLS wage and fringe benefit data in comparative reviews of current rate methodologies and in the development of future programs and rate methodologies where funding of staff is the principle means of service delivery.
-
RECOMMENDATIONS
The Wage and Fringe Benefits Work Group is providing the following specific recommendations. The table below provides information on the job classifications featured in these recommendations.
|
DSP |
QMRP |
Supervisor |
RN |
LPN |
Driver |
| Current CILA |
| Hourly Wage |
$10.71 |
$15.11 |
$13.40 |
$17.93 |
$14.43 |
N/A |
| Fringe Benefit |
R20.00% |
20.00% |
20.00% |
20.00% |
20.00% |
N/A |
| Wage and Fringe |
$12.85 |
$18.13 |
$16.08 |
$21.52 |
$17.31 |
N/A |
| Recommended |
| Hourly Wage |
$14.59 |
$22.32 |
$19.20 |
$30.19 |
$19.93 |
$14.59 |
| Fringe Benefit |
29.43% |
29.43% |
29.43% |
29.43% |
29.43% |
29.43% |
| Wage and Fringe |
$18.89 |
$28.89 |
$24.85 |
$39.07 |
$25.80 |
$18.88 |
-
Hourly Wages for Direct Support Professionals (DSP)
The Work Group agrees with the Direct Support Professional definition of the Quality Support 2005 (Workforce Development) Paper. The Work Group believes this definition correctly describes the provided services and work actually being done by DSPs. While this definition includes direct assistance with personal and home care and healthcare, its emphasis is not on these latter elements.
The Work Group further recommends that the Bureau of Labor Statistics (BLS) definition for Standard Occupation Code (SOC) 21-1093 Social and Human Service Assistants is the best fit to associate with the DSP job classification. The table above illustrates the resulting hourly wage.
-
Qualified Support Professionals (QSP)
The Work Group recognizes that the QSP credentials are extremely varied and include many professional occupations. The Workgroup recommends the use of the BLS SOC major series 21-0000 Community and Social Service Occupations as inclusive of professionals comparable to the QSP. The table above illustrates the resulting hourly wage.
-
Supervisor Worker Classification
This lead worker/supervisor position may also function as "house manager" in CILA. In the CILA rate model, the supervisor position wage is priced above the DSP but below the QSP wage. The Work Group supports this wage distinction and recommends the BLS SOC 21-1099 series "All Community and Social Service Specialists Not Listed Separately" as being consistent with the DSP and QSP recommendations above and with the wage distinction. The table above illustrates the resulting hourly wage.
-
Registered Nurse
This credentialed position has been linked to the BLS wage series for Registered Nurses in the Report of the Community Integrated Living Arrangement Nursing Services Reimbursement Work Group, January 2006. The table above illustrates the resulting hourly wage.
-
Licensed Practical Nurse
This credentialed position has been linked to the BLS wage series for Licensed Practical Nurses in the Report of the Community Integrated Living Arrangement Nursing Services Reimbursement Work Group, January 2006. The table above illustrates the resulting hourly wage.
-
Driver
The Transportation Rate Work Group discussions of the role of transportation to and from day programs have examined the vehicle driver function. After reviewing the duties of drivers in day programs, the Work Group has concluded that the driver is rarely, if ever, a full-time, dedicated function. Drivers are DSP-trained and typically will work in the day program as a DSP when not driving. The Work Group believes the same BLS wage classification for DSP is also appropriate for drivers.
-
Fringe Benefits
The Work Group recommends changes to the current levels of fringe benefits recognized by existing rate methodologies. Specifically, the BLS Employer Costs for Employee Compensation should be utilized to increase the fringe benefits of workers in recognition of current mandated benefits such as payroll taxes and other non-mandated benefits such as health and life insurance and retirement that are essential to attracting and retaining workers.
-
Wage Differentials
The Work Group is making two, related recommendations regarding differentials in wages:
- Shift Differentials - The practices among provider agencies vary widely regarding the use or non-use of shift differentials (nights vs. evenings vs. days or weekdays vs. weekends) and a shift differential is not recommended by the Work Group. The current recommendation for the use of a non-differentiated average hourly wage provides the operational flexibility for agencies to vary their practices.
- Program Type Differentials - The practices among provider service agencies regarding pay differentials vary widely among those who provide a "full-range" of day, and also residential, and/or also in-home services. A wage differential for agency-provided day, residential, and/or in-home services is not recommended by the Work Group. Again, the current recommendation for the use of a non-differentiated average hourly wage provides the operational flexibility for agencies to vary their practices.
-
ADDITIONAL REVIEW AND RESEARCH RECOMMENDATIONS
This section discusses items for which additional review and research are needed.
-
Geographic Wage Differentials
The Work Group is recommending further review of the issue of the use of geographical distinctions in wages. It is argued that wages do, in fact, vary across the state and that this should be reflected in the funding models in use. It is almost universally held among providers that they are competing with other employers and industries for workers and for worker retention because of currently available wage levels funded by rates. Providers all agree that they are at a disadvantage because their funding levels make it difficult to compete for workers against higher average wages in their area. Providers also agree that the wages needed to be competitive are greater in some areas than others. There is data from the U.S. Census Bureau and BLS Metropolitan Statistical Areas (MSA) geographic divisions (for both Metropolitan and non-Metropolitan areas of Illinois) that do appear to support this latter assertion. So, the Workgroups conclusion is that wages that can be paid under current CILA rate levels, for example, are not adequate anywhere and are more inadequate in some labor markets.
The Work Group also recognizes that some provider employers operating in multiple labor markets may not pay differently because of labor agreements or agency policy and practice. In addition, the smaller the geographic labor pool is for a more narrowly defined and particular wage index, the more likely it is that there will be measurement error or greater variability over time making the use of any such index a potentially volatile and unpredictable resource. Conversely, a more generalized index will have a larger labor pool base for a particular area, but in at least some areas of Illinois, the area average may be driven by a single large industry that is not reflective of the average worker - and this is true whether the large industry be union-scale factory workers, insurance companies, government, or perhaps a university. The Work Group has not concluded that there is a need for a geographical differential system and it recognizes the issue is sufficiently complex to warrant further study and review.
-
Geographic Differential Implementation
The Work Group further recommends that even with the resolution of the issues of the utility and need for geographical differentials and the accompanying methodological difficulties, implementation of such an approach moving away from the present single, statewide wage factor would be difficult. In the case of the ICFs/DD use of geographic wage differentials, the system was implemented at the same time that an entirely new rate-setting methodology was put into place. In the best of circumstances where sufficient funding enabled implementation of a new geographically differentiated system all at once with an increase available to everyone, the change is still likely to be perceived as one of some areas receiving a smaller increase than the increase for other areas. In a more realistic scenario, the availability of rate increases dedicated for the purpose of implementing a differential system would require the support of most stakeholders. A phase-in could somewhat ameliorate the perception that some areas were benefiting disproportionately over others.
-
Behavior Intervention (Level I and II Consultants)
At the beginning of FY2008, the Division expanded the role of Behavior Intervention in its Medicaid Waiver programs. The Behavior Intervention rates were increased based upon a credibility weighted wage value derived from the BLS hourly wage index for "Psychologist, all other," from telephone interviews with providers, and from the wages paid in state-operated centers for Clinical Psychologists. The Work Group recommends a review of this weighted approach from the practical standpoint of reviewing its impact on behavior intervention utilization in the system.
-
Counseling and Therapy
The Medicaid Waiver provides for Individual and Group Therapy and Individual and Group Counseling. Current values are derived from initial values from provider cost reports that have been updated for COLAs, when appropriated to the Division. The Work Group supports a review of these services in light of how they are being implemented in the field, their utilization levels, and their correspondence to wages reflective of psychologists and social workers that provide these types of services.
-
Specialized Skill Proficiency for Special Populations
A fundamental issue in providing and funding specialized services is having uniform, accurate, appropriate, reliable, and objective assessment tools and processes to identify and address individualized needs through the rate. The Wage and Fringe Benefits Work Group has identified the following specialized needs areas that may warrant rate adjustments driven by wage differentials. More review of these is needed.
- Communication - Staff with special language skills, such as non-English (e.g., Spanish), or non-verbal (e.g., sign language for a person with a hearing impairment, or palm signing for a person who is both deaf and blind, or use of communication tools (boards, picture systems, etc.) are skills that could be examined to determine if they warrant some type of wage differential. A fundamental issue how to determine the need for specialized staff, and how to gain and maintain proficiency, and whether or how to reimburse for these skills are important issues to consider.
Other signing for communicating with persons with Autism Spectrum Disorder or learning the unique and meaningful signing of an individual is an important process and skill acquired through experience that may be more generalized as being within the ordinary scope of duties in working with an individual with a developmental disability or they may be skills that are indeed specialized and that cannot be distinguished from other signing and communication proficiencies.
- Medical - The Report of the Community Integrated Living Arrangement Nursing Services Reimbursement Work Group, January 2006 provided a proposal for nurses in CILA that would provide for more staff and nurses for individuals with medical issues as indicated by the HRST assessment tool, which measure different levels of medical need. This proposal is being recommended by the CILA Rate Workgroup as a medical supports issue. The wage issue is addressed above in the Wage and Fringe Work Group recommendations.
- Behavioral Supports - The current process for funding behavior add-ons is based on a subjective determination and is an area that needs a lot of work. One view is that there is a general skill of implementing common methods of dealing with people that is certainly about human behavior but it is not about behaviors that are beyond a certain threshold.
For individuals whose behaviors warrant a more complex, formal, behavior management approach, DSPs and others do need to have some additional training and experience and a solid connection with behavior professionals who develop and oversee a person's behavior management plan. This may not be a skill that is so specialized for the DSP and QSP to warrant a wage differential but is certainly an issue of a need for staff.
It is often and reasonably argued that individuals with behaviors warrant more staff or specialized staff or both. The problem is that there is no generalized or standardized means of determining what is needed, how much is needed, how this complements base staffing already in the CILA model, etc. Currently, there is not a good assessment instrument or process for addressing behavior support needs. Often the only criteria are whether a person is harmful to self or others or destructive or disruptive.
The Wage and Fringe Work Group recognizes this issue needs more discussion and suggests that this Work Group should participate with others that are working toward review or development of assessment and individualized planning tools before a sound methodology can be developed and the issue of a wage differential can be addressed.
- Personal/Physical Care Supports - The Work Group lists this area as clearly being one where additional supports may be warranted. However, whether a wage differential is warranted requires more review.
