School workers slam insurance disparity

— Shelley Branscum of Fox asked lawmakers Friday why, as a public-school employee, she pays more than twice as much for insurance as state employees do and what they plan to do about it.

The House and Senate education committees’ Joint Subcommittee on Public School Employee Health Insurance is studying the issue for the 2013 legislative session.

On the wall of the committee room at the state Capitol hung petitions with signatures from some of the 4,189 school employees from about 80 schools around the state urging lawmakers to address the discrepancy.

Beginning Jan. 1, premiums for most insurance plans offered to public school employees will increase 20 percent, which Branscum said will make the problem that much worse.

Branscum, an art, Spanish and journalism teacher at the Fox Rural Special School in Stone County, said that while she was investigating the 20 percent increase, she learned how much less state employees pay for insurance. After the Arkansas Democrat-Gazette published an editorial she wrote on Sept. 17, she began receiving calls from other employees who had similar concerns, and the petition drive started, she said.

“I know people that have quit teaching because they cannot afford to support their families,” Branscum said. “That’s outrageous. We can’t afford our insurance and we really want something to be done about it.”

The state’s 45,000 teachers, cafeteria workers, janitors and other school employees are considered school-district employees, not state employees.

The Department of Finance and Administration’s Employee Benefits Division administers the same insurance options for state employees and school-district employees.

Division Executive Director Jason Lee said school employees and state employees are very similar groups. They are about the same number, the same age, the same health risks and have nearly the same base premium level, he said.

The difference between what the two groups pay for insurance is almost entirely due to how much the state pays toward each group’s insurance plan, Lee said.

The state provides $390 a month for every state employee, compared with $131 a month for each school employee.

In 2013, a state employee with the best possible coverage and no dependents will pay $95.78 per month while a public school employee with the same circumstance will pay $226.70, or 2.36 times as much.

A state employee with family members in the top, or gold, plan will pay $419.62 a month. A public school employee in the same situation will pay $1,029.96 per month.

Subcommittee Co-chairman Rep. Randy Stewart, D-Kirby, pointed out that lawmakers have agreed to increase the amount the state pays for state employees’ insurance each year without much discussion, but haven’t increased the share for public employees since 2004.

“The difference is, we’re not putting enough money into the pot,” he said.

“We didn’t bat an eye at raising the state employee health benefit by $3.5 million a year and they’re already getting three times what a school employee is getting,” Stewart said. “Everything seems to be going against the teachers, the school employees.”

The $131 figure comes from the state’s funding matrix, which provides a certain amount per pupil to school districts to provide an adequate education. In the 2012-13 school year, districts receive $6,267 per student.

The school districts are expected to add to that $131 minimum contribution paid by the state from their own funds. However, they aren’t required to spend the $131 on insurance premiums; some spend less and use the remainder for other needs, Arkansas Education Association Executive Director Rich Nagel said.

The association’s position is that the school districts, not the state, should have the primary responsibility to pay the premiums, Nagel said.

“School districts are not making the kind of contributions they need to make,” he told the committee.

Nagel suggested requiring the school districts to spend at least the minimum amount provided through the matrix on insurance premiums.

“We think it’s worth taking a hard look at,” Nagel said.

Sen. Joyce Elliott, D-Little Rock, who helped write the funding matrix, said a requirement wasn’t put into the matrix so districts would have the flexibility to spend the money as they saw fit.

“The compromise was struck that ‘you fund it and we’ll do the right thing at the local level’ so that we would not take away local control,” she said.

The districts that put in more than the $131 minimum contribution are paying 7 percent of the $275 million that is spent on the health insurance program for public-school employees, Nagel said.

“School districts only putting in $21 million in a $275 million program, that cannot continue,” he said.

State government pays 49 percent (including the $131 that originates as state money) and the employees pay 44 percent, Nagel said.

“It is wrong,” Nagel said. “It is far too much.”

He suggested linking the amount from the matrix to an annual increase, similar to a cost-of-living increase.

Committee Co-chairman Sen. Johnny Key, R-Mountain Home, said the Legislature will likely address the issue in the 2013 session, but he doesn’t expect major changes to occur quickly.

“It’s just such a huge dollar amount to bring full equity, which is what a lot of the school employees are asking for, that could take a few years,” Key said. “But I do think we’ll take a step toward fixing it.”

Key said there is little that can be done about the 20 percent increase to the cost of premiums occurring at the beginning of the year.

“I don’t see a mechanism to help the situation on Jan. 1,” Key said. “We’re talking about a solution that would have to go into effect July 1 [when the state fiscal year begins].”

Branscum said she understands that there are other areas of the state budget that need a funding increase this year and legislators may not be able to help public-school employees as much as they’d like.

“I do see them maybe phasing in some more funding to sort of try to equalize things over a period of time. I don’t think they’re going to be able to throw a big chunk of money at it,” Branscum said. “I expect something to happen, something immediate, but it will probably start small and incrementally increase.”

Branscum said she is still accepting signatures from school employees at [email protected] and will petition legislators again if needed.

Arkansas, Pages 9 on 12/01/2012

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