Fewer school workers sign up

Health enrollees down 3% in ’14

Despite $43 million in additional state aid, enrollment in the state’s public-school employees health-insurance plan for 2014 dropped by more than 1,400 from the 46,227 participants this year, the executive director of the state’s Employee Benefits Division told lawmakers Tuesday.

In October, the Legislature decided to give $43 million of the state’s surplus to the plan to reduce a proposed employee-rate increase of about 50 percent to about 10 percent for 2014.

Officials weren’t expecting the roughly 3 percent drop in enrollment.

“The last two years we had a little increase in employee numbers, and we thought with the Affordable Care Act requiring individuals to have health insurance that we would see a bump, so that [loss in enrollment] was not anticipated,” division Executive Director Bob Alexander told the State and Public School Life and Health Insurance Program Legislative Task Force.

In 2010, Congress and President Barack Obama enacted the Patient Protection and Affordable Care Act to overhaul the nation’s health-care system.

Alexander said he still expects the plan’s premiums to increase about 10 percent in 2014.

The plan covers teachers, cafeteria workers, janitors and other school employees and their families.

Enrollment in the most expensive plan - which is called the gold plan - dropped from 26,229 this year to 18,577 in 2014, while the enrollment in the least expensive plan - which is called the bronze plan - increased from 15,210 this year to 21,446 in 2014, he said.

Regarding the shift of members out of the gold plan, state Sen. Jim Hendren, R-Sulphur Springs, and task force co-chairman, said, “We would like to think it is because of better value, but we all know it is because they can’t afford it anymore.”

“There has got to be some structural reform”with the public-school employees health-insurance plan, he said.

Under rates approved by the State and Public School Life and Health Insurance Board in October, the premiums for the gold plan for individual employees will increase to a maximum of $249.38 a month in 2014, up from $226.70 this year. The monthly employee premiums for family coverage under the gold plan will increase from $1,029.96 to $1,132.96.

The premiums for the bronze plan for individual employees will increase from $10 to $11 a month while the premiums for family coverage will increase from $245 to $269.50 a month under the rates approved by the board.

Alexander said the division expected to lose more people from the gold plan and gain more people in the bronze plan than it did. The number of employees in the silver plan dipped from 4,788 this year to 4,756 in 2014, he said.

The reduced number of plan members - coupled with the number of people shifting from the gold plan to the bronze plan - will reduce the plan’s revenue projections by roughly $21 million for 2014, and that’s “pretty close to where we were in the forecast.”

But Alexander said he’s presented the latest enrollment figures to the division’s actuary to get “a more realistic projection” for the plan’s finances for 2014.

The state employees are projected to pay $131 million in premiums this year, while school districts are forecast to contribute $96 million and the state is expected to chip in $58 million, he estimated in October. The plan’s expenses are expected to total $312 million this year with reserves covering any shortfall.

During the regular session earlier this year, the Legislature sent $8 million from the General Improvement Fund to help shore up the health-insurance plan and increased the school districts’ minimum contribution toward their employees’ premiums from $131 to $150 per month starting in January.

Alexander said school districts paid an average of $147 per employee per month into the plan in 2003, and that increased to only $153 in 2012.

“That’s a good example … why the contribution rates for public-school employees go up because, if you have pretty flat funding from the school districts, and there is some money coming from the state, but it also been flat since 2009 … [employees end up shouldering rate increases],” he said.

During the three-day special session in October, the Republican-controlled Legislature also enacted measures to lay the groundwork to shift $36 million a year in state funds, including facilities and professional development funds, to the public-school employees health-insurance plan in the future.

But state Sen. David Sanders, R-Little Rock, said the task force is going to discuss “some potential major restructuring” of the plan.

“My hope and my goal is to give the absolute best product, the outcome of good health care, to both our teachers and our state employees, but do it in a way that also serves the interests of the taxpayers as well,” he said.

Sanders said the task force should set goals and outcomes.

“I am encouraged by the migration [from the gold plan] to the bronze level plan,” he said. “I would be more encouraged if we see more drive to the [health savings account] plans.”

Arkansas, Pages 9 on 12/18/2013

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