DALLAS — Arkansas may draw on its fiscal 2013 surplus to avoid a looming 50% increase in health care premiums for teachers and public school employees.
Gov. Mike Beebe said he would call a special legislative session to deal with the insurance increase only if lawmakers can agree on a solution by Oct. 15.
A state insurance board in August approved an almost 50% increase in the premiums of the most popular coverage plan, which has no deductibles.
The monthly premium for the popular plan would go to a maximum of $336 a month from the current $227 per month.
Underfunding by the state and local districts will require a $54 million infusion of new money in 2014 to avoid the increased premiums set to begin Jan. 1, the state Employee Benefits Division told lawmakers earlier this year.
The health insurance program covers 47,000 teachers and other school employees.
To add to its woes, the insurance program's $10 million catastrophic events fund was wiped out by five claims in 2012, officials said.
"The system has more claims paid out than money coming in," Beebe said.
Four lawmakers have proposed two alternatives that would take most of the needed new money from $163 million of unobligated state funds remaining at the end of fiscal 2013.
Both legislative proposals would go into effect Jan. 1, a year earlier than Beebe's solution, according to the memo circulated to lawmakers Oct. 4.
One of the legislative options would require $36 million from the surplus with a 16% increase in employee premiums. The other would lower the premium increase to 10% with $43 million of surplus funds.
Beebe backs a plan to divide the bill equally among the state, school districts, and school employees beginning in 2015.
The state would contribute $18 million under Beebe's plan, with another $18 million in state funds allocated to school districts. Beebe's plan includes $18 million in higher employee premiums.
Beebe had earlier delayed the deadline for enrolling in the insurance program to Nov. 1 from Oct. 1 in hopes of reducing the increase.