Public-school teachers face insurance rise

Plan costlier by 50% OK’d

The maximum health insurance premium for teachers and other public school employees will increase about 50 percent starting next year for most plans under rate increases approved by a state board Tuesday.

For the state’s gold plan, the most popular plan for public school employees, the maximum premium for individuals will increase to about $336 a month, up from $226.70 this year.

The monthly premium for family coverage under the plan will increase to about $1,528, up from $1,029.96 this year.

The increases, along with benefit cuts also approved Tuesday by the State and Public School Life and Health Insurance Board, were designed to close a $50 million gap in funding facing the plans that cover about 83,000 people, including 47,000 teachers, cafeteria workers, janitors, and other school employees and their families.

After the meeting, a spokesman for Gov. Mike Beebe said the governor will ask the Legislature for more money for the plans during next year’s fiscal session “to offset some of the impact of the increased premiums on the teachers.”

“We’ve known for a while that this is somewhere that we could end up,” Beebe spokesman Matt DeCample said. “I think it had been hoped that it could have been prevented, but here we are.”

Teachers have cited a lack of funding from the state and school districts as a reason the premiums have increased. The state contributes $50 million a year toward the plans - about $89 for each worker enrolled. School districts are required to contribute at least $131 per month for each worker. Starting Jan. 1, the required contribution by school districts will increase to $150 per worker.

The health insurance options offered to state employees are identical, but the premiums are lower, largely because state agencies contribute more money - $410 a month for each budgeted position.

This year, premiums for the public school employees’ gold plan increased 22 percent, while the premiums for the state employees’ gold plan stayed the same.

Under the rates approved Tuesday, premiums for state employees’ plans will increase about 1 percent.

Any increase in state funding for the public school employees’ plans would be for the fiscal year that starts July 1, 2014, DeCample said. The amount the governor will ask for hasn’t been decided, he said.

Doug Shackelford, interim director of the state Department of Finance and Administration’s Employee Benefits Division, said any additional money allocated for the plans likely won’t affect premiums until 2015.

“Unless we receive an influx of money right now, there’s not much that can be done for the coming plan year,” Shackelford said.

The board on Tuesday hired Bob Alexander, an attorney with the state Insurance Department, to take over as director of the division. He replaces Jason Lee, who resigned in June for a job with a private insurance company. Alexander starts Sept. 3.

For most of the public school employees’ plans, the State and Public School Life Insurance Board approved a 48 percent increase in the premium, then added an additional increase - $5 for single coverage and $10 for family coverage - meant to build the plans’ reserve fund for catastrophic claims, which was wiped out in 2012.

For the bronze plan, the lowest-cost option and the second most-popular plan, the board increased the premium from $10 to about $49 for single coverage and from $245 to about $373 for family coverage.

For the state employees’ gold plan, the premium will increase to about $96 for single coverage, up from $95 this year. For family coverage, the premium will increase to about $423, up from $419.62 this year.

State employees do not pay a premium for the bronze plan for individual coverage, but do for family coverage. The premium will increase from $92.20 to about $93.

The state employee plans cover more than 64,000 people, including 28,000 employees and their families.

The board also approved higher copayments and deductibles recommended for plans for public school and state employees by a subcommittee earlier this month. For instance, copayments for doctor’s visits in the gold and silver plans will increase from $25 to $35.

Deductibles for single coverage will increase from $750 to $1,000 for the silver plan and from $1,500 to $2,000 for the bronze plan.

For family coverage, the deductible will increase from $1,500 to $2,000 for the silver plan but will remain unchanged for the bronze plan at $3,000. The gold plan does not have a deductible.

Employees will be able to switch plans in October, with their choices becoming effective when the coverage year starts Jan. 1.

Board members complained during Tuesday’s meeting, which drew about 50 spectators, about the options available for keeping the public school employees’ plans solvent.

“If we keep saying we can put it on the backs of the employees - I think we’re at the tipping point,” said board member Shawn Cook, superintendent of the Lakeside School District.

An unusually high number of catastrophic claims in 2012 wiped out the plans’ catastrophic claims fund. To help shore up the plans, the Legislature this year allocated $8 million in one-time funding to the plans.

Arkansas Surgeon General Joe Thompson, a member of the board, abstained from the vote on the benefit changes, explaining later that he didn’t think the plan design for the public school employees’ insurance was realistic given the amount of available funding.

At his suggestion, the board agreed to send a letter to legislative leaders, school administrators and Beebe expressing the board’s “discomfort with the fiscal status” of the public school employees’ plans.

“We’ve got to raise an alarm bell coming from the board,” Thompson said.

Front Section, Pages 1 on 08/21/2013

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