University of Arkansas Office for Education Policy

#5 Special Session Called to Prevent Steep Hikes in Teacher Health Insurance Rates

In The View from the OEP on December 18, 2013 at 10:20 am

Health insurance has been a big topic in the news across the nation this Fall, but perhaps even more so in Arkansas, where the governor called a special legislative session to address a $50 million shortfall in the public school employee (PSE) health insurance fund. In August, teachers and other public school employees received the news that their health insurance premiums were expected to increase by as much as 50%. For example, an individual plan that previously cost $226.70 per month would increase to $336, and a family plan would go up from $1,029.96 to $1,528. That’s quite a hit!

health insurance

In the three-day special session, legislators came to agreement to “bail out” the PSE health insurance fund through a combination of a one-time $43 million transfer from the state surplus fund, savings from general facilities and supplemental millage funding, a reduction in professional development funding and the number of required hours, and (much smaller) premium increases for public school employees. As a result, premiums have only increased by about 10% rather than close to 50%; for example, individual plan premiums will now be $249.37 per month instead of $336, and family plan premiums will be $1,133.96 rather than $1,528.

You can read more about the special session in our blog post.

One concern held by Governor Beebe and several legislators was that a special session would solve the short-term crisis without addressing the underlying problem that caused the shortfall in the first place. To prevent such a crisis from happening again, legislators passed Act 3, which formed a State and Public School Life and Health Insurance Program Legislative Task Force to study long-term fixes for teacher insurance and to present recommended changes by June 2014.

Just today, we received an update on this story. The AR Democrat-Gazette reports that enrollments are down in PSE health insurance this year. Executive Director Bob Alexander stated that this news comes as a surprise because he anticipated a rise in enrollment due to the provision in the Affordable Care Act that requires individuals to have insurance. Co-chairman of the related task force, Sen. Jim Hendren, R-Sulphur Springs, stated that he believes that less employees are enrolling because they cannot afford it anymore. Some potential major restructuring of the plan is being discussed by the legislative task force.

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