Finance Board approves increase to contributions for worker medical health insurance premiums


The State Board of Finance on Friday unanimously approved increasing the speed paid to cover the price of Arkansas state worker medical health insurance premiums. Currently, the state provides coverage for about 160,000 state and public school employees together with retirees and their families.

Jake Bleed, director of the Worker Advantages Division, told board members during a hearing that the state paying 65% of the price of medical health insurance premiums isn’t enough.

“Right away our rates don’t reflect best practices. Our rates have actually been held flat for plenty of years,” Bleed said. “Those of you who work in insurance for any period of time know that as plan costs go up, while the rates are held flat then those rates will not be reflective of the particular cost of coverage being provided.”

Arkansas doesn’t have any method to raise rates without legislative approval and that is an element of the explanation the state’s contributions have stayed flat, Bleed explained.

In keeping with a memo from the Worker Advantages Division, if Arkansas keeps the speed at 65%, the state’s medical health insurance plan for public school employees will begin deficit spending by 2025 and run out of its reserves by 2028.

Larry Walther, the state’s chief fiscal officer, said it was essential to search out an answer.

“Obviously, that is a very important a part of the strategy the state uses to recruit people looking for to be employed with the state,” Walther said. “It is required to keep up [the state’s] workforce. It’s a very important a part of our advantages package.”

Milliman, Inc, a risk management consulting firm based in Seattle, Washington, advisable the state must pay 80% of the price of premiums for worker medical health insurance plans. Bleed told the board the 15% increase would still keep Arkansas’ contribution rate below surrounding states, with a few of them paying as much as 90%. Currently, Arkansas pays the bottom rate into worker medical health insurance plans amongst surrounding states, in keeping with the memo.

Bleed said to implement the rise to 80%, it could need to be done over a couple of years.

Within the memo, Bleed wrote employees are unlikely to see dramatic changes of their premium rates, under this proposal. The memo says many employees will see a decrease, while retirees under 65 are more likely to see increases of their premiums.

The proposed rate increase still needs approval from the Arkansas Legislature and Gov. Asa Hutchinson to take effect.


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