A legislative panel on Thursday signed off on a proposed Bureau of Legislative Research contract for up to $611,200 with The Segal Group of Atlanta for employee health insurance consulting services through Dec. 31, 2024.
The Legislative Council's executive subcommittee on Thursday recommended the full council, which meets today, approve the contract.
Under the proposed contract, The Segal Group would work with the state's Employee Benefits Division to draft a request for proposals for a vendor to provide Medicare Advantage with prescription drug coverage to public school and state retirees as well as a request for proposals for a pharmacy benefit manager.
The division administers the state's health insurance plans that cover more than 100,000 public school and state employees and retirees.
Under the proposed contract, the consultant also would assist the Legislative Council in conducting a study about the possible implementation of a diabetes management program by the Employee Benefits Division.
The firm would report to the Legislative Council each month on the diabetes management study plus the progress of the procurement processes for prescription coverage, implementation of the new contracts and savings realized by the new contracts in plan year 2023.
The Segal Group projected that the Employee Benefits Division would release a request for proposals for a Medicare Advantage vendor on March 12 and the state Board of Finance would approve a contract for a vendor on June 30. The consultant also projected the division would release a request for proposals for a pharmacy benefit manager in March or April and the Board of Finance would select one in August. Both contracts would start Jan. 1, 2023.
A Legislative Council co-chairman, Rep. Jeff Wardlaw, R-Hermitage, wondered who would pay for educating the plans' retirees about the Medicare Advantage coverage.
The Medicare Advantage vendor will go around the state to educate retirees in the state plans about Medicare Advantage coverage and will pay for the educational and communication efforts, Ken Vieira, senior vice president for The Segal Group, said.
Jake Bleed, director of the Employee Benefits Division, told lawmakers, "We have a constitutional obligation to manage the procurement as an executive branch and we are going to take that role very seriously.
"Now obviously we look forward to working with [The Segal Group] on all of this," he said. "They have a lot of experience and they are really good at what they do. But we want to reiterate that we have a job to do [for] our boss -- the governor -- as part of that procurement process."
A draft bill -- proposed by Legislative Council co-chairmen, Wardlaw and Sen. Terry Rice, R-Waldron -- would require the Employee Benefits Division director to enter into a memorandum of understanding with the director of the Bureau of Legislative Research to share services with the consultants hired by the bureau for the most cost-effective vendor for prescription pharmacy services and medical services within 10 business days of the effective date of the proposal.
Afterward, Senate President Pro Tempore Jimmy Hickey, R-Texarkana, said the division will benefit from The Segal Group's expertise.
"This has been broken and we are [fixing] it for the long term," he said, referring to the health insurance plans. "We think this is the way we need to proceed."
Tracey-Ann Nelson, executive director of the Arkansas Education Association, told lawmakers on Thursday that "we were very worried" that the interests of public school employees would be forgotten and placed behind "the dollar signs and balance sheets" under Act 1004 of 2021.
Act 1004 of 2021, sponsored by Hickey, dissolved the 15-member State and Public School Life and Health Insurance Board, which was largely appointed by the governor, and transferred its duties to the state Board of Finance.
The Board of Finance has 10 members who include the governor, treasurer, auditor, secretary of the Department of Finance and Administration, securities commissioner, bank commissioner and two appointees each named by the House speaker and Senate president pro tempore.
Nelson said Thursday, "I want to acknowledge the finance board, Rep. Wardlaw, your dogged commitment to finding a fix to this, and Sen. Hickey."
She said The Segal Group's recommendations would create a sustainable school health insurance plan and "gives us confidence that our lawmakers work in the best interests of our public school employees and their fellow public servants."
Nelson said association members are happy with the plan to provide pharmacy benefit coverage through Medicare Advantage to retirees.
In May, the Legislative Council approved a consulting contract worth up to $575,000 with The Segal Group through Dec. 31, 2021, 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.
On. Nov. 19, the council approved the recommendations of the consulting firm that are aimed at stabilizing funding and cutting costs for the two health insurance plan.
During the past week, legislative leaders have been circulating several draft bills that largely reflect these recommendations with an eye to considering them in either the fiscal session starting Feb. 14 or a special session.
Last month, the council extended its contract with The Segal Group until the end of this month to complete its work for the bureau for up to $57,500.