Beebe, 10 craft plan to rein in insurance

$43 million to aid school employees

Gov. Mike Beebe and about 10 key lawmakers Tuesday agreed on giving $43 million in surplus funds to the health-insurance plan for public-school employees to avoid an increase of about 50 percent in premiums, Beebe and House Speaker Davy Carter, R-Cabot, said Tuesday.

Without the extra state money, the premiums are expected to climb beginning Jan. 1. With the additional state subsidy, premiums will rise only about 10 percent, state officials said.

“We still have to go out and convey that and make sure there is [legislative] support for that,” Carter said after a 2½-hour meeting between the lawmakers and Beebe in the Governor’s Conference Room in the state Capitol.

Beebe has repeatedly said he and lawmakers must reach a consensus on both short-term and long-range fixes for the financially ailing health insurance plan before he’ll call the Legislature into a special session on the matter. Otherwise, the earliest the Legislature could take action would be during its fiscal session that starts Feb. 10.

Beebe has suggested splitting up future cost increases for the health-insurance plan, starting in 2015, with the state, school districts and plan members each chipping in $18 million a year, according to an unsigned memorandum circulated by legislative leaders Friday.

For the most part, Carter said, there is agreement between key lawmakers and the governor on the various funding sources for a long-term fix.

“There are still some moving parts out there that we have got to get out to the membership [of the Legislature],” he said, but he declined to disclose them because he wants to consult representatives first.

Beebe also declined to reveal details about the long-term funding sources for the plan, noting that legislative leaders had requested that he wait.

Carter said, “Everybody wants to find a solution, but when you get down to details, like anything else, it starts to become a little more difficult to get a consensus.

“I am hopeful by the end of the week we’ll be in a position where we know exactly what we are looking at and exactly what sort of member support is out there,” he said.

Bob Alexander, director of the state’s Employee Benefits Division, has cited a lack of funding from the state and school districts as the primary reason rates have increased.The plan covers 47,000 teachers, cafeteria workers, janitors and other school employees and their families.

Two weeks ago, Beebe delayed the enrollment period for participants in the plan from Oct. 1-31 until Nov. 1-20 to give lawmakers more time to reach agreement on remedies for the plan. He’s said that the Employee Benefits Division advised him that Oct. 15 was the “drop-dead date” to give it enough time to be able to print material for the Nov. 1 start of the enrollment period.

Under rates approved in August by the State and Public School Life and Health Insurance Board, the premium for the most expensive and popular plan for individual school employees would increase next year to a maximum of $336 a month, up from $226.70 this year.

A 10 percent premium increase would boost the cost to about $249.37 a month, according to Alexander.

The monthly premiums for family coverage under the most expensive and popular plan is expected to rise to about $1,528 in 2014, up from $1,029.96 this year, if the Legislature does nothing.

A 10 percent premium increase would boost the monthly cost of family coverage under the plan to about $1,133.96, according to Alexander.

Carter said he doesn’t believe ethics legislation will be on the agenda if Beebe calls a special legislative session.

He said it’s probably “the better course” for such legislation to be considered in2014. A two-thirds vote of the House and the Senate would be required to introduce ethics legislation during the fiscal session.

“There is bipartisan support for some ethics reform. I just don’t think that this is the right time to do it. This [health insurance] is a big enough issue and time consuming enough for any sort of special session,” Carter said.

Carter’s remarks came after Rep. Warwick Sabin, D-Little Rock, circulated drafts of 11 ethics bills to representatives calling for a wide range of changes.

“In the interest of everyone’s time, I had some ethics legislation drafted that addresses the points that both [political] parties identified in their recent pronouncements,” Sabin wrote in an email to representatives. “I understand that some of these bills may not achieve the broad support necessary to earn consideration during a special session, but I thought it would be beneficial to put everything in front of you and see where it all goes.”

Among other things, the draft bills would prohibit the use of campaign funds to purchase tickets to fundraising campaign events for other candidates. The Arkansas Ethics Commission also would be required to review the campaign-finance records it receives and investigate potential wrongdoing that is uncovered. Lawmakers also would be required to report all expenses of $50 and above. Currently, only expenses of $100 or more must be disclosed.

Front Section, Pages 1 on 10/09/2013

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