ICMYI: State called on to use surplus on health plan May 17, 2021
The Arkansas Education Association is calling on state officials to use part of the general revenue surplus to address the funding shortfall in the state’s health insurance plan for public school employees.
“Following the announcement of a $700 million surplus, we believe some of those funds should be used to prevent teachers and education support professionals from massive rate hikes that will likely force many to drop the plan,” Tracey-Ann Nelson, the association’s executive director, said Friday.
“Arkansas’ educators risked their health to keep our schools open during the pandemic. It is imperative their health insurance plan be affordable and provide meaningful benefits,” AEA President Carol B. Fleming.
Fix educator insurance plan funding
CAROL B. FLEMING
SPECIAL TO THE DEMOCRAT-GAZETTE • May,17th, 2021
Arkansas educators devote their lives to teaching, supporting, and inspiring our state’s future. Educators have shown up in school buildings every day during the worst public health crisis in our lifetime. I am in awe of the creativity, strength and commitment they have shown to meet the needs of their students.
In the 2021 legislative session, lawmakers passed and Gov. Asa Hutchinson signed a measure raising the median teacher pay in Arkansas after data showed Arkansas was falling behind other Southern states. This is a good and important step forward to reduce the pay disparity between districts; however, I would be remiss if I didn’t note that this pay increase won’t reach most teachers in our state. In addition, no educational support professionals like bus drivers, bookkeepers, custodians, secretaries, or special education aides will see a benefit.
Now, educators are facing an additional challenge. Rising health-care costs and a flawed funding mechanism have created a projected shortfall of approximately $70 million in the Public School Employee health insurance plan. After hearing of the shortfall, the state Legislature abolished the State and Public School Life and Health Insurance Board overseeing the plan and shifted that responsibility to the State Board of Finance, which has never dealt with health plans or insurance.
Before the board was abolished, it adopted a proposal that would dramatically harm educators by increasing monthly insurance premiums by an astonishing 10, 15 and 20 percent in the 2022 plan year. In addition, educators would lose half of a wellness benefit that currently reduces premium costs. This means the monthly contribution for a single employee on the classic plan would jump 45 percent from $71 to $103 each month. This untenable proposal is now being considered by the Board of Finance.
These dramatic increases in insurance premiums will erode the progress in teacher pay and drive educators who are not teachers out of the plan altogether. This reduced pool will make the plan less financially secure and more expensive to operate while robbing people of a key benefit that helps secure a stable work force.
This painful proposal won’t solve the underlying issue. Health-care costs are rising at an annual rate of 7 percent, but there is no built-in state funding mechanism to anticipate this, resulting in the state contributing a smaller percentage of the plan’s cost each year.
Arkansas’ educators risked their health to keep our schools open during the pandemic. It is imperative their health insurance plan be affordable and provide meaningful benefits. Educators must have a seat at the table for decisions regarding their plan.
Now, policymakers must step up and do right by educators. The state has reported a surplus of over $700 million. The plan needs a short-term infusion of state revenue to avoid shifting the cost to educators in the coming months. In the long term, the state must act responsibly by creating a sustainable funding mechanism that anticipates the annual increase in health-care costs.