SUBJECT:	Fringe Benefit Rates As Of June 4, 2003
DATE:	June 4, 2003

The Department of Health and Human Services (DHHS) has now formally approved our federal fringe benefit rates for FY 2003/04. The negotiated rates for FY 2003/04 and the projections through FY 2005/06 are summarized below. These fringe benefit rates should be used for budgeting and long range planning purposes, as well as when preparing grant applications that cross fiscal years. The FY 2004/05 and FY 2005/06 rates are very preliminary estimates. The estimated rate increase for Hourly Staff is driven by increasing contributions to the Employee Retirement Plan (ERP) and projected increases in medical care costs. Rates do not reflect potential cost containment initiatives.

	Monthly Staff	House Staff	Hourly Staff	Students
FY 03/04 Budget-Non Federal	23.6%	16.3%	24.2%	7.7%
FY 03/04 Budget-Federal	21.8%	16.3%	23.3%	7.7%
FY 04/05 Projected-Non Federal	23.8%	16.6%	26.7%	7.7%
FY 04/05 Projected-Federal	22.1%	16.6%	25.9%	7.7%
FY 05/06 Projected-Non Federal	24.0%	20.3%	28.9%	7.7%
FY 05/06 Projected-Federal	22.3%	20.3%	28.0%	7.7%

Two sets of fringe benefit rates are specified for each fiscal year. The “Federal” rates will be used for federal grants and contracts and for Durham Regional Hospital, AHS/DASC, and Raleigh Community Hospital. The “Non-Federal” rates will be used for all other entities including non-federal grants, contracts, departments, etc. The differentiation in fringe benefit rates reflects the elimination of Federal participation in the reimbursement of the tuition grant fringe benefit program for federally funded grants and contracts and for Durham Regional Hospital, AHS/DASC, and Raleigh Community Hospital.