Rising insurance premiums causing teacher to rethink profession


LITTLE ROCK — Arkansas teachers and other public school employees pay a premium for health insurance already, so when Kristen Alford learned that rates were set to rise nearly 50 percent come Jan. 1, her mind started racing.

“I was looking at a second job or getting out of teaching altogether because I can’t afford it,” the business teacher at Lead Hill High School in Boone County said. “If nothing is done, my insurance will be $1,500 a month. It’s now $1,000.”

Alford has a masters degree and is in her fourth year of teaching in the district. She is married and has two young children. She said about a third of her salary currently pays for health insurance under what is called the Gold Plan, which covers her entire family.

“The cost of that is ridiculous already,” she said.

To compound the Alfords’ financial crunch, when the school district reduced some staff to meet budget constraints, one of the personnel let go was her husband, who had been working as a non-certified music teacher in the school district until he gets his teaching license.

“He’s subbing at the school now, so it’s just my income. It’s definitely hard on my family,” and paying much more for health insurance would make things worse, Alford said.

She welcomed news last week that Gov. Mike Beebe and legislative leaders have tentatively agreed on a plan to hold next year’s increase to about 10 percent.

“I think we pay too much already, but I’m excited by it, because I think going up just $100 is a lot better than $500,” she said.

Lawmakers and the governor have yet to agree on a long-term solution to school employees’ health insurance, though measures are being consider. Beebe has said he wants consensus on short- and long-term solutions before calling a special legislative session to address the problem.

School employees’ health insurance rates have been rising for several years because of a lack of funding from the state and local school districts, according to Bob Alexander, director of the state Employee Benefits Division. Also, a $10 million catastrophic claims fund was wiped out by five claims in 2012 and 2013 that each totaled more than $1 million.

In September, Alexander told a legislative committee it would take $53 million in new money to keep premium rates at current levels next year.

Under the short-term alternative on which there is general agreement, the state would use $43 million from a budget surplus to hold down teacher insurance rates next year.

Legislators cautioned that developing a long-term solution would be more difficult, though some expressed guarded optimism that a deal could be struck soon.

Some lawmakers said they already were receiving calls from constituents who don’t like the idea of using state funds to help just teachers. Also, some school districts apparently are worried about being required to contribute more to school employees’ health insurance.

“On the basis of what I know, I would guess we’re about a week or two out from having something that has any chance of getting a majority consensus on,” Rep. Kim Hammer, R-Benton, said Thursday.

One long-term solution under consideration includes dividing school employee health insurance costs between the state, school districts and school personnel — currently, the districts and employees split the cost, along with a number of structural modifications, including preferred-rate premiums for non-tobacco users and for people participating in wellness plans, and requiring deductibles for all plans. The Gold Plan currently has no deductible.

The state, school districts and the employees each would pay a third of the cost, about $18 million each.

The state’s third would include $10 million from the Public School Fund, $5 million from an adjustment to the rate allocated for budgeted positions in state agency budgets and $3 million from general revenue.

The school districts’ third would include $2 million from the professional development categorical fund, $12 million from reducing professional development hours and reallocating supporting funds, and $4 million from facilities funding.

The remaining $18 million would be paid by teachers and school employees in increased premiums.

Timing is critical is the search for solutions.

Last month, Beebe announced a one-month delay of the date when teachers can begin signing up for health insurance as lawmakers weighed options to address rising premiums. The start of the sign-up period was pushed back from Oct. 1 to Nov. 1.

At the time, the governor said the state Employee Benefits Division had informed him it needed some direction by Tuesday to begin printing insurance application materials.

Rep. Bobby Pierce, D-Sheridan, said late last week he was not sure consensus on a long-term solution could be reached in such a short period of time.

“Personally, I don’t think a special session will carry,” Pierce said, adding agreement may not come before next year’s fiscal session.

The budget session convenes Feb. 10, weeks after the higher health insurance premiums are to take effect.

“I’m still kind of holding to the Oct. 15 deadline,” Beebe said after meeting with lawmakers last week.

He said the Employee Benefits Division could begin preparing its materials to include the short-term option that would hold the health insurance premiums to a 10 percent increase.

“But if something falls apart on the follow-up stream and I can’t call a (special) session, even for that $43 million, then (the Benefits Division) would have to back up and have a new enrollment period with going back to the old rates,” he said.

Sen. Johnny Key, R-Mountain Home, said many hurdles remain before a consensus can be reached.

“The agreement on the short-term was an agreement in that Senate Education Committee,” said Key, chairman of the Senate education panel. “Yes, it’s the long term, in that second year, that we have to find additional funds where there is general agreement on most of it.

“But our task is to find a certain dollar amount, and cobbling together all the funds we’re going to pull from to fill in all those holes, that’s the challenge.”

Key said he was cautiously optimistic that an agreement can be reached by late this week.

Alford said she is glad lawmakers are working on a solution and wishes teachers didn’t have to worry about whether they could afford to stay in their chosen profession.

“I just want teaching to get back to the basics and how it use to be. People use to want to be teachers and now it is as if we’re encouraging students not to become teachers, and that’s sad,” she said.