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Legislators back leaving Arkansas schools' premiums alone

Changes to wellness credit also gain panel’s support by Michael R. Wickline | July 21, 2021 at 4:08 a.m.
FILE — The state Capitol is shown in this file photo.

A legislative panel on Tuesday endorsed the state Board of Finance's recommendations for no changes in premiums next year for employees and retirees in the state's health insurance plan for public schools.

The committee also backed the board's recommendations to cut a wellness credit for current employees and create a contribution for employees who don't participate in the wellness credit.

With no debate or questions, the Legislative Council's personnel subcommittee voted to recommend that the full council on Friday approve the finance board's recommendations for changes next year to the public school health insurance plan. The plan covers more than 100,000 people.

"It sounds to me like the emails worked," the subcommittee co-chairman, Rep. David Hillman, R-Almyra, told his fellow lawmakers.

Afterward, Hillman said he received a few hundred emails from teachers who said they wanted no rate increase next year.

"We sort of did what they wanted," he said.

The finance board's recommendations for next year call for cutting the wellness credit for employees from $50 to $25 a month and creating a $25 monthly contribution for non-participants in the wellness program. The board also called for requiring employees to visit their primary care doctors for the wellness credit next year.

On July 7, the finance board voted to approve these recommendations to the Legislative Council. The board was operating under Act 1004 of 2021, which dissolved the State and Public School Life and Health Insurance Board and temporarily transferred its duties to the Board of Finance.

Gov. Asa Hutchinson, who is a member of the finance board, has praised the board's recommendation for no premium increase for public school health insurance.

"We fought hard to increase teacher salaries, and I am hopeful for approval of this recommendation by the Legislative Council," the Republican governor tweeted July 8.

The finance board's recommendations would cut the plan's projected $70.1 million deficit to a projected surplus of $1.9 million next year and increase the plan's projected reserve fund next year from $3.8 million to $75.7 million, according to Milliman, an actuarial firm for the state's Employee Benefits Division.

On June 18, the Legislative Council approved the Board of Finance's request to put $35 million into the public school health insurance plan in fiscal 2022, which started July 1. The money will come from the state's restricted reserve fund.

The state Department of Education had been planning to provide $110 million in state funding to the school health insurance plan for next year, after providing about $130 million this year.

But Department of Education Secretary Johnny Key told the board on July 7 that the department will be able to put $20 million more than originally planned into the insurance plan next year. This year's contribution included $20 million in one-time supplemental funds, according to state officials.

Milliman now projects the state's contribution to the public school health insurance plan will be $165 million next year.

The actuary projects the minimum contributions from school districts will total $99 million next year -- up from a projected $94 million this year.

Milliman projects employees' and retirees' contributions at $168 million next year -- up from a projected $148 million this year.

After factoring in a projected $17 million a year in other income for this year and next year, Milliman projects the plan's total funding at $450 million next year -- up from $390 million this year.

In May, the Legislative Council approved a consulting contract worth up to $575,000 with The Segal Group of Atlanta to review health insurance plans for public school and state employees and retirees, and recommend changes to ensure their long-term solvency.

The Bureau of Legislative Research's contract with The Segal Group of Atlanta runs through Dec. 31 with an option to renew for six months.

Print Headline: Legislators back leaving schools' premiums alone

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