Gov. Mike Beebe and some of the legislative leaders have tentatively agreed on a plan to hold next year’s increase in the cost of what public school employees pay for health insurance to about 10 percent increase instead of the nearly 50 percent as expected now.
The package being circulated is a draft proposal the governor hopes might meet short and long term needs. The school employees’ health insurance rate will be going up because of a lack of increase in funding from the state and local school districts and also because of $10 million in claims from the catastrophic claims fund that was wiped out by the five claims in 2012 and 2013.
In September, the director of the benefits division told a legislative committee it would take $53 million in new money to keep premium rates at current levels next year. Under the new proposals circulated last week, $43 million from the state budget surplus would be used this year to limit the increase in premiums to 10 percent in January.
In the future, the legislature would direct $63 million to school employees health insurance plans. That would include $10 million from general revenue, $16 million from the school facilities program and $10 million from state funding for professional development. The task force has also recommended reforms to the system.
One suggestion was to have greater cost sharing and incentives to put money in to health savings accounts and changing from what some call a “gold plan” above what most state employees have. A short term fix might be able to be passed in a special session and a long term plan debated in the fiscal session which starts in January. To have a plan in place when the increases would take place Jan. 1, there would have to be a special session called. However, before a session is call the governor and legislative leaders want to be sure that there is an agreed upon plan so that the session will be short, maybe only three days.
Because of the federal shutdown some state employees whose programs are funded or are partially funded by federal dollars have been furloughed and as the shutdown continues more could be furloughed. Many programs were funded through the year and those positions or jobs will not be affected unless the shutdown continues unto the first of next year.
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