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Council OKs school health plan

Insurance premiums won’t change; wellness credit trimmed by Michael R. Wickline | July 24, 2021 at 3:40 a.m.
A classroom is shown in this 2015 file photo.

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 won the approval of the Arkansas Legislative Council on Friday.

The council also approved 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 discussion or questions, the Legislative Council voted to approve finance board's recommendations for changes next year to the public school health insurance plan. The plan covers more than 100,000 people.

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 nonparticipants in the wellness program. The board also called for requiring employees to visit their primary care doctors for the wellness credit next year.

Afterward, Gov. Asa Hutchinson, who is a member of the finance board, said Friday that he appreciates the council's quick approval of the board's recommendations.

"This will allow teachers to keep more of their paycheck and still keeps the health insurance fund in a safe financial position," the Republican governor said in a written statement.

"We can continue to look for longer term solutions."

On July 7, the Board of Finance voted to send 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. That board previously made decisions about the insurance plans for school and state employees. The act temporarily transferred the insurance board's duties to the finance board.

The finance board's recommendations will cut the school 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.

Tracey-Ann Nelson, the executive director for the Arkansas Education Association, said Friday that the association has been working to elevate educator voices around this issue for months.

"Today's vote represents a huge victory for active and retired educators across Arkansas," she said in a written statement. "We applaud Governor Hutchinson and legislators for listening to educators and finding a solution to the shortfall.

"The association will continue to work with policy makers to develop long term, sustainable solutions for the insurance plan," Nelson said.

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.

The Legislative Council's executive subcommittee is working with a consultant, The Segal Group of Atlanta, to review the state's health insurance plans for public school and state employees and retirees, and recommend changes to ensure their long-term solvency.

In May, the Legislative Council approved a consulting contract worth up to $575,000 with the consultant that runs through Dec. 31 with an option to renew for six months.

Print Headline: Council OKs school health plan

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