Legislative leaders are circulating several bills that would change state laws on the governance and funding of state health insurance plans that cover more than 100,000 current and retired public school and state employees.
The draft bills largely reflect recommendations from consulting firm The Segal Group that the Legislative Council approved on Nov. 19.
The Segal Panel’s recommendations are aimed at stabilizing funding and reducing costs for both health insurance plans.
Senate Pro Tempore Chairman Jimmy Hickey, R-Texarkana, said Monday the drafts are being released to allow people to begin reviewing them and making suggestions for potential changes.
“It’s been a monstrous process to go through and figure it out,” he said.
Gov. Asa Hutchinson said Monday he supports changes in state law in principle to protect health insurance plans.
“I haven’t seen the final draft, but I want to be in favor of it and I want to do what is necessary to have these passed at the budget session or most likely a special session that will be convened at the same time. than the budget session,” the Republican governor said in an interview. The fiscal session begins on February 14.
Under a bill proposed by Hickey and a co-chairman of the Legislative Council, Rep. Jeff Wardlaw, R-Hermitage, the State Finance Council would continue to be the governing body of health insurance plans and the state insurance commissioner would be added to council only to vote on health insurance plans.
The Finance Council has 10 members, including the Governor, Treasurer, Auditor, Secretary of the Ministry of Finance and Administration, Securities Commissioner, Bank Commissioner and two persons each appointed by the President of the House and the acting President of the Senate.
The finance board has governed the plans since Act 1004 of 2021 dissolved the 15-member Public Schools and Public Schools Life and Health Insurance Board, which was largely appointed by the governor, and transferred his duties on the finance council.
The bill would also create five-member benefits advisory commissions for each plan.
The two commissions would meet monthly and each appointee would receive an allowance of $500 per month plus mileage. Each advisory commission would make recommendations by January 31 beginning in 2023.
Hickey described the two advisory boards as “operating committees” that would deal with health insurance plans and make recommendations to the State Finance Council, which in turn would make recommendations to the Legislative Assembly. .
A second bill proposed by Hickey and Wardlaw would require the director of the state’s benefits division to aim for an optimal reserve balance of 14% of expenditures to ensure the solvency of each plan, beginning in the year of plan 2023.
Under this proposal, if the Division Director determines that the amount of income received by the Division should not equal or exceed the acceptable amount of the reserve balance of 12% of a plan’s expenses during a year of the plan, the Director would be required to notify the Legislative Council of the need to meet to consider providing more funds.
If additional funds are required to keep the reserve balance acceptable, the Legislative Council may recommend that the Governor call a special session of the Legislature or take other action, as appropriate.
If by July 30, the General Assembly fails to provide the necessary funds to maintain an acceptable reserve balance, the Director shall initiate a process to collect the required additional revenue from program participants by increasing the premium and/or reducing program benefits for the next plan year.
If the Director determines that the reserve balance for either plan should exceed 16% of expenses, the Director may elect to use the excess to directly benefit the Plan by lowering the premium rates for the next year of the plan or by expanding the benefits with the approval of the Legislative Council.
A bill proposed by Wardlaw and Legislative Council Co-Chairman Terry Rice R-Waldron would require the Legislative Council to create the Division of Benefits subcommittee to oversee the plans.
The proposal would require the director of the Employee Benefits Division to enter into a memorandum of understanding with the director of the Office of Legislative Research to share services with consultants hired by the office for the most cost-effective vendor for the services of prescription pharmacy and medical services within 10 business days of the effective date of the proposal.
Hickey said it was possible the Legislative Council would extend the office’s contract with the Segal Group for additional work with the employee benefits division on drafting requests for proposals, “but that’s not set in stone yet. in marble”.
The proposal would also require the Employee Benefits Division Oversight Sub-Committee, with the cooperation of the Division Director, to review general diabetes management programs to assess the viability and sustainability of such a program for health insurance plans. A report summarizing the results of the study is expected to be tabled with the Legislative Council no later than July 1, 2024, under the draft legislation.
Other drafts include:
• A proposal by Rep. Brian Evans, R-Cabot, and Sen. Missy Irvin, R-Mountain View, that would require school districts to pay the health insurance premium rate set by state boards of education. House and Senate as part of the biennial suitability review process for each eligible employee electing to participate in the Public Schools Employee Health Insurance Plan, beginning January 1, 2023.
• A proposal from Rep. Mark Berry, R-Ozark and Hickey that would eliminate the $550 per month contribution cap for each state agency budgeted position to contribute to the state employee health insurance plan.
• A proposal from Representative Jim Dotson, R-Bentonville and Irvin that would allow the Finance Council to establish an annual spending limit on a plan option for coverage of the diagnosis and treatment of morbid obesity, subject to the approval of the Legislative Council.
• A proposal by Evans and Hickey that would require prospective state and public school employees to be enrolled in the respective state health insurance plan for at least five cumulative years to receive health insurance coverage as a than retired. The proposal would grandfather current public schools and state employees to health insurance coverage as retirees, Hickey said.
Officials from the Arkansas Education Association and the Arkansas State Employees Association on Monday welcomed the proposed measures.
John Bridges, director of the Arkansas State Employees Association, said, “The association’s board of directors and I agree that these bills will go a long way to improving transparency and overall health of the regime”.
Arkansas Education Association Executive Director Tracey-Ann Nelson said, “We appreciate the hard work of lawmakers who have led the charge on this package of bills.
“Right now, the last thing educators need to worry about is access to and cost of health care,” she said in a written statement. “This package will ensure that the public school health insurance program is sustainable and salient for the long term.”