A potentially serious financial crisis exists for a public school employee insurance fund that could be $60 million in the red.
Marci Manley with our content partner, KARK Ch. 4 News, reports:
The Department of Finance and Administration’s Employee Benefits Division insures roughly 150,000 Arkansans. It’s facing a shortfall in the Public School Employee sector for 2014 to the tune of $60 million. Number crunchers say it’s likely that rates will have to increase to make up for it.
The Employee Benefits Board heard the reality of the situation during a subcommittee meeting on Friday. The Public School Employee (PSE) sector has fallen millions behind, because of unexpected, major claims filed in 2012.
“A 60 million dollar short fall for 2014 is a very significant number,” said Executive Director Jason Lee. “Those large claims were filed after the rates were set for 2013. They wiped out the reserve fund, so we’re having to replenish that, plus continue filling claims.”
The reserve fund was $11 million dollars. The board has to decide whether to increase deductibles, raise premium rates, or eliminate benefits. And none of those options exclude the others.
Read more of Manley’s story from Channel 4 at this link.