Teacher insurance: Finances improve but employee pain continues | Arkansas Blog

Thursday, November 13, 2014

Teacher insurance: Finances improve but employee pain continues

Posted By on Thu, Nov 13, 2014 at 8:23 PM

This afternoon's meeting of the legislative task force on resolving the public school employee (PSE) insurance crisis brought a positive development: The system will end the year with over $17 million in net assets. Last November, that figure was $0. According to financial statements presented by the Employee Benefits Division (EBD), which manages the PSE fund, the system's net income year-to-date is almost $31 million; at this point in 2013, the system had suffered a net loss of nearly $7 million. Now the system has sufficient cash on hand to fully fund an $11 million catastrophic reserve, which had been wiped out by an exceptionally bad claims year in 2012.

It's great news. Since summer 2013, the system has been either teetering on the brink of disaster or tumbling over the edge. Getting to this point of relative stability has taken two special sessions, repeated infusions of money and a restructuring of the plans offered by EBD. Bob Alexander, the head of EBD, said the financial results were "way better" than expected to see earlier in the year.

Make no mistake, the bipartisan task force deserves credit. The worry now is that legislators, who will face a number of other budget dilemmas during the 2015 session, will lose urgency in addressing the more human dimension to the crisis, which has not abated: The difficulties faced by school employees and their families struggling under the burden of unreasonable premiums.

The fund may be stable, but on the level of individual employees' pocketbooks, things are as bad as they've always been. In the past year, monthly premiums have risen significantly and benefits have been cut. The average Arkansas school employee still pays twice the share of her premium as the average worker in the private sector. While that's tough on teachers and their families, it's absolutely brutal on low-wage classified employees, like custodians, cafeteria staff and classroom aides. To bring down premiums to reasonable levels, more public money simply must be committed to the insurance fund, either from the state, from individual school districts or both.

click to enlarge UNAFFORDABLE: Teachers say high insurance premiums may drive them from the profession. - SHELLEY SMITH
  • UNAFFORDABLE: Teachers say high insurance premiums may drive them from the profession.
Today, Shelley Smith, a teacher at the Mountain View district, presented the task force with the results of a survey of 1,132 Arkansas school employees. Smith administers a PSE Facebook group that she created to gather stories and trade information about the insurance situation, and she's been advocating before the legislature for the past couple of years.

Among the results of her survey: 90 percent of PSEs say they are unsatisfied with EBD and its management of health insurance. Virtually every employee that responded — 99 percent — gave the insurance options low marks for being "reasonable and affordable."

"I don't know how many companies with ratings like that would be able to stay in business," Smith told the committee. "So, obviously, there's still work to be done here."

According to the survey, 70 percent of teachers said that they'd considered retiring or leaving the education profession because of the PSE insurance system.

"I'm thinking about it myself," Smith admitted. "If even a half or a third of those people go through with it, that's a lot of people ... the severity of the situation cannot be overexaggerated."

It's true that the survey is largely self-selected — the bulk of those PSEs who responded came from Smith's Facebook group, which is likely to be composed of folks dissatisfied with the system, and it's probably not representative of the population distribution of the state. Yet even so, such numbers should be alarming to anyone who care about public education.

Perhaps a legislator such as Sen. Jim Hendren (R - Gravette), who chairs the task force, or Sen. David Sanders (R - Little Rock) should direct legislative staff or the Department of Education to perform a more formal version of Smith's survey. If more than half of school employees have contemplated finding a new line of work because of unaffordable insurance premiums, the legislature needs to face that fact sooner rather than later.

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