The executive director of the group that represents school superintendents and principals said this week that his group will not oppose proposed bills dealing with school employee health insurance in the upcoming special session because doing so would be fruitless.
“Our strategy is to just watch and monitor the session to make sure other bills are not drafted and run through committees,” Dr. Richard Abernathy with the Arkansas Association of Educational Administrators wrote in an email. “These bills have been agreed upon and will pass. That is the problem with a special session … offers no transparency in the process so a few make the decision.”
Legislators will meet June 30 to pass bills meant to prevent large increases in school employee health insurance premiums. Draft legislation would remove 4,000 part-time school employees from eligibility in health insurance plans as well as school and state employee spouses eligible for coverage from their own employers.
Abernathy wrote that a task force studying the issue under the leadership of Sen. Jim Hendren, R-Gravette, and Rep. Harold Copenhaver, D-Jonesboro, is “moving in a positive direction.”
However, he questioned the fairness of dropping part-time school employees but not part-time state employees from eligibility. He also questioned a requirement that all plan participants have a health savings account, in which a person can save money tax-free for healthcare needs. He said some school employees are Medicare-eligible, which makes them ineligible under federal law to have a health savings account.
In an interview, Hendren said there are only 280 part-time state employees, many of them elected officials, and that removing them would not generate savings. Creating a fair resolution for part-time state and school employees was not part of the task force’s function. As for the health savings account, Hendren said that he had been assured by the state’s Employee Benefits Division that Medicare-eligible employees would not be affected. If a state law conflicts with a federal law, the federal law trumps.
He said a technical adjustment can be made in January. So why not amend the bill now?
“It is so difficult to achieve consensus in both houses and between the governor’s office, and once you do that, you just don’t mess with it,” Hendren said.
The legislation removing part-time and other employees from health benefit eligibility must be designed to save money for the state health plan, not just school districts. However, the legislation cannot simply send less money to districts without risking running afoul of the state’s school funding formula, which could result in a court case. To work around that, the package allows the Employee Benefits Division to recoup money from school districts for the payroll taxes they will save because they no longer will contribute money to their part-time and certain other employees’ health insurance.
Abernathy expressed concern that the legislation is written so broadly that EBD could apply that provision in other areas. Hendren said that is not the intent, and that if that does occur, the problem could be fixed in January when the Legislature meets in its regular session.
The bills that are expected to pass next week will not solve the school and state employee health insurance system’s problems by themselves. EBD is also implementing changes to rate plans. More changes are expected as the task force continues to meet. Potentially, the school employee and state employee plans could be merged.
Abernathy said that whatever happens, schools need more money, not less.
“Overall, if we want to see the plan be sustainable, we must have additional state dollars (not diverting money from schools),” Abernathy wrote. “I don’t believe we will see any influx in state money to the plan. We must also have additional people on the plan, especially those young healthy employees!!”