State: 500 workers forgo 'free money'

Gov. Asa Hutchinson should ensure that insurance agents working for the state are allowed to meet with state employees to discuss health savings accounts and other benefits, a legislative task force recommended on Friday.

The State and Public School Life and Health Insurance Program Legislative Task Force unanimously approved the recommendation after Bob Alexander, director of the Department of Finance and Administration's Employee Benefits Division, told the panel that about 500 state employees who have high-deductible health plans are missing out on employer contributions because they have failed to open health savings accounts.

Of the 27,000 employees covered by the state's insurance plans for employees, about 2,800 are in plans that can be used with health savings accounts.

Contributions made to such accounts are tax deductible and can be spent only on health-related services and products.

Of the employees eligible to have health savings accounts, 1,800 are in the state's classic plan, which has a deductible of $2,500 for an individual or $5,000 for a family, and 960 are in the basic plan, with deductibles of $6,450 for an individual or $12,900 for a family.

On Jan. 1, the state began contributing $25 a month to the accounts of employees with individual coverage, and $50 a month to the accounts of employees with family coverage.

But some employees have failed to open accounts, making them ineligible for the payments.

"We know we've got a problem when 500 people won't take free money," Alexander said.

He added that only about 2,500 state employees have flexible spending accounts, which are similar to health savings accounts but can be used with low deductible plans.

Federal rules allow a $500 balance from flexible spending accounts to carry over from one year to the next. The balance from a health savings account that can be carried over is unlimited.

Alexander said he wants representatives from Little Rock-based H&H Employee Benefits Specialists, which coordinates supplemental employee benefits for state employees, to be able to meet with employees one-on-one to discuss health savings accounts, flexible spending accounts and other benefits, such as vision and dental coverage.

But some state agency directors have refused to allow the meetings, he said.

"They just don't see the need, they know the enrollers are there to sell something, it could be a laundry list," Alexander said.

Carlton Saffa, a policy adviser to Hutchinson, said he supported the recommendation and would communicate it to the governor.

Hutchinson said in a statement that he had not yet reviewed the recommendation but said it is "certainly an idea that needs to be considered."

The Employee Benefits Division manages the health plans for public school employees, but does not administer their supplementary benefits, Alexander said.

Of the 43,000 public school employees covered by state plans, about 22,000 are in plans that can be used with health savings accounts. But the state does not contribute to those accounts.

The Legislature created the task force during a special session in 2013 in which lawmakers also appropriated $43 million in one-time funding to prevent a 50 percent increase in the health insurance rates for school employees.

Next year, the rates for state and public school employee plans will stay the same as they are this year.

The task force chairman, Sen. Jim Hendren, R-Sulphur Springs, said Friday that he and the vice chairman, Rep. Bill Gossage, R-Ozark, have asked legislative leaders to allow them to step down from the task force.

"We think it's important that there be some fresh ideas," Hendren said.

Hendren added after the meeting that he needs to devote his attention to his role as a chairman of the Health Reform Legislative Task Force, which will make recommendations on changes to the state's Medicaid program.

Metro on 07/18/2015

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