Rising costs of OK’d health insurance; State plan premiums will increase by 5%

Without discussion, the Arkansas Legislative Council on Friday approved a 5% increase for the next calendar year in premiums for current and retired employees of the State Employees’ Health Insurance Plan and changes in government credits. well-being for current employees.

The changes were proposed by the State Finance Council earlier this month. The government employee scheme covers more than 58,000 people.

The board also approved a revised request for $ 35 million from the state’s restricted reserve fund in fiscal year 2022 to help consolidate the state’s other health insurance plan, for employees. public schools and retirees, in addition to requests for an additional $ 62.5 million from the fund. for other government programs. The Public School Employees and Retirees Health Insurance Plan covers more than 100,000 people.

Fiscal year 2022 begins July 1.

The Finance Council proposed the insurance changes under Law 1004 of 2021, which dissolved the Public and Public Schools Life and Health Insurance Council and temporarily transferred its functions to the Finance Council.



Beyond the 5% increase in premiums in 2022, board approval of the Finance Council’s recommendations will result in a reduction in the welfare credit for current state employees from $ 50 to $ 25. $ per month and the creation of a contribution of $ 25 per month for employees who do not participate in the welfare credit.

The council’s action will also mark an end to on-site wellness clinics and require current employees to see their primary care physician for wellness credit.

Most government employees currently enrolled in the health insurance plan are covered by the premium plan. The other plans are said to be classic and basic.

The council’s action will mean that 9,389 state employees currently included in the bonus plan with the welfare credit will see their monthly contributions to the plan drop from $ 143.99 to $ 176.19, or 22.4 % more, next year, while a projection of 3,738 active state employees with monthly premium plan children’s contributions with welfare credit will increase from $ 263.52 to $ 301.70, that’s 14.5% more next year, according to estimates by actuarial firm Milliman, which is employed by the state employee benefits division.

According to forecasts, 2,597 state employees active in the premium plan without welfare credit will see their monthly contributions increase from $ 193.99 to $ 226.19, or 16.6% more next year, while 905 employees with children in the premium plan without welfare credit will see their monthly contributions increase from $ 313.52 to $ 351.70, or 12.2% more, next year, according to Milliman.

Next year, 8,219 retirees over 65 in the plan will see their monthly contributions drop from $ 183.92 to $ 193.12, or 5%, while 2,684 retirees over 65 whose spouses benefit Medicare will see their monthly contributions increase from $ 440.62 to $ 462.65, or 5%, according to Milliman’s estimates.

The state’s monthly funding per employee will increase by $ 50, from $ 450 to $ 500, effective August 1 of this year, with board approval of the board’s recommendations.

These changes are expected to eliminate the projected deficit of $ 33.3 million in 2022 for the state employee health insurance plan, state officials say. Milliman now forecasts a 2022 reserve estimate of $ 38.6 million, based on the changes.

The finance council also recommended that the Legislative Council create a reserve of $ 10 million in the restricted reserve fund or another fund for the Medicare plan in case that money is needed next year.

$ 35M FOR


The Legislative Council on Friday approved the revised request for $ 35 million from the restricted reserve fund in fiscal year 2022 for the public school employee health insurance plan. The Finance Council initially recommended the transfer of funds for fiscal year 2021, which ends on June 30.

The board also approved 13 requests from Governor Asa Hutchinson to transfer a total of $ 62 million from the restricted reserve fund to various state programs and projects.

These requests included:

• $ 28.5 million for the State Department of Education’s Educational Institutions Partnership Program.

• $ 12.4 million for the State Higher Education Division to expand graduate medical residency programs.

• $ 4.8 million to the Arkansas Economic Development Commission for a grant to the Arkansas State Police Foundation to be used for improving the Police Precision Driving Track of the state of Arkansas. The upgrades will include the addition of an observation tower for track safety and a maintenance shop for vehicle operations.

• $ 4 million to the Division of Higher Education for scholarships for historically black colleges and universities, and for outreach programs to promote scholarship awareness.

• $ 3.8 million to the Arkansas State University System to implement an enterprise resource planning system for its seven institutions.

• $ 3 million to North Arkansas College to partially fund the planned construction of its $ 8 million center for robotics and manufacturing innovation. Other funds will include federal grant funds, private and local contributions, local grant funds and college reserves.

• $ 2 million to the Department of Public Security for the Crime Victims Reparations Revolving Fund to continue providing financial compensation to victims who have suffered injuries or died as a result of violent crime.

• $ 1.5 million to the Vocational and Technical Education Division for the statewide expansion of the Career Coaching program.

• $ 1 million to the Department of Agriculture to provide grants to county and district fairs to cover the inevitable expenses and needs created by the coronavirus.

• $ 483,000 to the Division of Higher Education to ensure the start-up and initial distribution of loans and / or scholarships for the program of loans and scholarships for rural medical practice in osteopathy.

• $ 325,000 to the Department of Labor and Licensing to help provide funds to Arkansas Athletic Commission operations following a funding cut caused by the covid-19 pandemic.

• $ 300,000 to the Department of Veterans Affairs to provide counties with financial assistance of $ 500 per quarter for each quarter that the county’s Veterans Duty Officer maintains accreditation with the United States Department of Veterans Affairs and $ 500 of plus per quarter for each quarter the officer obtains or maintains proficiency and access to the Department of Veterans Affairs Benefits Management System. Law 941 of 2021 created an incentive structure to ensure county veterans service officers maintain the tools and training necessary to better serve Arkansas veterans, the secretary of state for federal affairs said. veterans, Col. Nate Todd.

• $ 75,000 to the Department of Agriculture to provide a grant to the city of Washington in southwest Arkansas for an emergency road improvement project.

The transfers will reduce the Restricted Reserve Fund’s reserves from $ 171.4 million to $ 73.9 million, according to Bureau of Legislative Research records.

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About Evelyn C. Heim

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