Insurance tab high for state employees

Arkansas pays less of bill, report says

Monday, August 18, 2014

Arkansas' state employees paid more, on average, for health coverage than their counterparts in other states last year, even though the state's average-plan benefits were slightly less generous, according to a report released last week.

The report by the State Health Care Spending Project found that Arkansas state employees paid an average of $88 a month for individual coverage in 2013, compared with a national average for state employees of $69 a month.

The Health Care Spending Project is an initiative of two grant-making organizations: the Philadelphia-based Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation in Chicago.

For coverage that included dependents, Arkansas state employees paid an average of $290 a month, compared with a national average of $231 a month.

At the same time, coverage provided under the Arkansas plans was less comprehensive. The average Arkansas state employee's plan would cover 90 percent of expected medical costs for the typical enrollee, while the average state employee plan nationally covered 92 percent of expected medical costs, according to the report.

But the report also found that 90 percent of the Arkansas employees were in plans with no deductible, compared with 45 percent of state employees nationally.

Maria Schiff, director of the State Health Care Spending Project, said the report was the first ever to compare spending for state employee plans in nearly every state -- all except Pennsylvania, where information was listed as being unavailable.

"This information has not been available prior to this," Schiff said. "We feel there's going to be a lot of discussion state to state about how certain things have worked."

The report doesn't examine school employee plans, which were the focus of special sessions of the Legislature in Arkansas last year and this year because of funding shortfalls that prompted premium increases and funding and benefit cuts.

About 28,000 state employees are enrolled in the state's plans.

Bob Alexander, director of the state's Employee Benefits Division, said the state will spend about $171.8 million this year for coverage under the state employee plans, including $30 million for retirees.

According to the report, Arkansas state employees paid the 19th-highest premiums, on average, for individual coverage, and the 16th-highest premiums for coverage that included dependents.

Employees in Hawaii paid the highest average premiums in both categories -- $184 for individuals or $523 for those with dependents.

Employees in Texas, South Dakota, Minnesota, Iowa and North Dakota did not pay premiums for individual coverage, and those in North Dakota paid no premiums for coverage including dependents.

Employees in Montana and Oklahoma were listed as having negative average premiums for individual coverage, and those in Oklahoma were listed as having negative average premiums for coverage with dependents.

According to the report, the employees in those states received benefit allowances that exceeded the cost of health coverage. The allowances could also be spent on other benefits, such as dental or vision coverage.

Among the other states bordering Arkansas, employees paid average premiums for individual coverage of $35 in Mississippi, $92 in Missouri, $120 in Tennessee and $137 in Louisiana.

Average premiums for coverage including dependents were lower than Arkansas in Tennessee, $259, and Texas, $275, but higher in Missouri, $301; Mississippi, $373; and Louisiana, $379.

The premiums paid by Arkansas employees were higher than the national average even though the total cost of coverage, including the state contribution, was lower.

The monthly cost of individual coverage including the state contribution was $415, compared with a national average of $571, while coverage including dependents cost $902 a month, compared with $1,238 a month nationally, according to the report.

The Arkansas state contribution averaged 79 percent of the cost of individual coverage, compared with 88 percent nationally.

For coverage including dependents, Arkansas paid an average of 68 percent of the cost, compared with 81 percent nationally.

To keep up with rising medical costs, the State and Public School Life and Health Insurance Board in June increased the premiums for state employee plans starting Jan. 1, with the premium for the most popular plan rising about 8 percent a month for individual coverage and about 14 percent for family coverage.

The most popular plan, the gold plan, will be renamed the premium plan and will have a deductible of $500 for individual coverage or $1,000 for individual coverage.

The current plan has no deductible.

A law passed last month during a special legislative session also excluded from coverage spouses of employees who can get coverage from their own employers.

Marc Watts, senior legislative analyst for the Arkansas State Employees Association, said that change will hurt some employees' family budgets.

He said the group supports increased state funding to hold premiums down and lower employees' prescription drug expenses.

Sen. Jim Hendren, R-Sulphur Springs and chairman of a legislative task force examining further changes to the plans for state and public school employees, said the report is a "good reference point."

But he noted that differences in benefits make it difficult to compare plans.

"I don't think anything in that report stuck out to me that we've got to do some dramatic change in level of funding or mix of funding," Hendren said.

Metro on 08/18/2014