A state agency on Friday expanded a contract with a Little Rock actuarial firm to include analyzing proposals to shore up the state’s health-insurance plan for teachers and other public school employees.
Osborn, Carreiro & Associates has conducted studies for legislative committees that deal with retirement issues since 1998.
On Friday, the Bureau of Legislative Research expanded the contract to include up to $50,000 over the next two years for work for other committees, including those dealing with teacher health insurance. The contract alsoincludes up to $100,000 for the firm’s work with the retirement committees during that period, an increase of $4,000 from the contract covering the previous two years.
Sen. Jason Rapert, R-Bigelow, said the firm’s assistance will be helpful as lawmakers consider changes to the teacher health-insurance plan, which expects to increase its rates by nearly 50 percent starting Jan. 1.
Rapert, chairman of the state Senate’s Committee on Insurance and Commerce, has called for an infusion of state cash to avert the rate increase, as well as changes to the plan to prevent similar increases in future years.
“We have the money tofix the short-term situation,” Rapert said. “We just need to put the hard work into figuring out what the long-term fix is going to be.”
Gov. Mike Beebe, a Democrat, has said he wants to reach an agreement with legislators on a solution before calling a special session of the Legislature to address the issue.
Beebe spokesman Matt DeCample said the governor will meet with legislators, teachers and superintendents next week to explore proposals.
“We’ve had some people crunching some numbers, and we’ll share those as we have these meetings,” he said.
Under the rates approved by the State and P ublic School Life and Health Insurance Board, the premium for the most expensive and most popular plan for school employees will increase next year to a maximum of $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.
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 for the plans covering 47,000 teachers, cafeteria workers, janitors and other school employees and their families, while rates for identical plans covering state employees have been stable.
State agencies contribute $410 for each budgeted position to help pay for state employees’ insurance. School districts are required to contribute at least $131 per enrolled employee. The state also contributes a total of $50 million a year toward school employees’ insurance - or about $89 per employee enrolled in a plan.
A fee, imposed under the 2010 federal health-care law to help insurance companies cover people with high medical bills, will add $5.25 per month to cost of insurance starting next year, according to the Employee Benefits Division. The law also mandated the removal of annual and lifetime limits on coverage, but Alexander said the teacher and state employee plans did not have such coverage limits even before the law was passed.
Beebe has said it would cost the state about $58 million to avoid any premium increases in the school employees’ plans.
Rapert said the state could use money from the $300 million surplus in tax revenue collected during the fiscal year that ended June 30.
The state’s budget director, Brandon Sharp, said last week that about $164.8 million of the surplus has not been obligated or appropriated.
Among the possible changes to the school employees’ plans are combining them with those for state employees, letting schools form their own plans, or giving employees subsidies for insurance that they would purchase through private health-insurance exchanges, Rapert said.
The Legislative Council and its Policy-Making Subcommittee reviewed the contract with Osborn, Carreiro & Associates on Friday.
Rep. John Walker, D-Little Rock, questioned why the contract was awarded without soliciting bids from other firms.
Sen. Linda Chesterfield, a Little Rock Democrat and a co-chairman of the subcommittee, responded that Osborn, Carreiro & Associates has experience working with legislators on retirement issues and is the only firm that could perform the work.
“Now is not the time to go looking for other folks,” she said.
Northwest Arkansas, Pages 9 on 09/21/2013