What is Senate Bill 5430?
Senate Bill 5430 passed the Washington Legislature and was signed into law by Governor Inslee on May 10, 2021. When the bill takes effect on July 24, 2021, it will limit the future price of GET units to no more than 10 percent above that year’s current unit payout value, which is based on in-state tuition rates. This price limit will apply as long as the current state tuition policy remains in effect and GET’s funded status remains over 120%.
Importantly, this bill will also lower the price of units bought during the current enrollment year. Any families buying lump sum units between July 1, 2020 and June 30, 2021 can expect to receive nine percent more units later this year after the current $133 unit price is adjusted down to approximately $122. GET participants who set up new Custom Monthly Plans between November 1, 2020 and May 31, 2021 will have their on-going monthly payment amounts lowered and their accounts will be credited based on any payments already made on the plan.
Can I get a refund of the difference instead of more units?
The bill states that we must translate any difference in this year’s price into units. This means that for lump sum unit purchases, you will have units added to your account. For Custom Monthly contracts opened in the 2020-21 enrollment year, we anticipate lowering the monthly payment for customers, while keeping the same unit contract level. Any overages from payments made on the account prior to the bill’s passage will either be credited to your account as additional units or applied toward future payments.
When will I get my unit price adjustment for units bought at $133?
GET will make every effort to make the proper adjustments in a timely manner, likely before the end of 2021. When the repricing is complete, WA529 will notify all affected GET account holders of the changes made to their account.
What’s different about this approach to pricing?
By law, the WA529 Committee must administer the program in an “actuarially sound” manner in order to ensure the program is self-sustaining. Accordingly, the GET program sets an annual unit price that is informed by actuarial analysis. In two of the past four years, reflecting a sensitivity to keeping units affordable, the Committee has selected a unit price below the State Actuary’s recommended best estimate, but still within a range determined to be “reasonable” by the State Actuary. The unit price includes a premium above current tuition levels. This premium is added to ensure the financial soundness of the program and make the future “guarantee” possible. Senate Bill 5430 changes the balance of risk to the state while enabling customers to expect more consistent annual pricing adjustments.
We will continue to post additional information about Senate Bill 5430, including the timing of any adjustments as it becomes available.