Ala. state employees' insurance rates not raised

By BOB JOHNSON

MONTGOMERY, Ala.

Alabama state employees will not have to pay any more than the current $15 a month in premiums for health insurance during the next fiscal year beginning Oct. 1.

The State Employees Insurance Board had considered a proposal to raise the premium when the employees insurance program is operating on a tight budget and has not received a funding increase from the Legislature in several years.

But the board Wednesday in a split vote agreed to leave the premiums as they are and instead raise monthly rates by $15 for early retirees who aren't 65 and not eligible for Medicare. The cost for early retirees will go from $181 to $196 effective Oct. 1.

The board voted to increase the copay for state employees making a doctor's visit from $30 to $35 beginning Jan. 1.

The board also voted to spend $10 million from a federal health care windfall in the 2011 fiscal year which starts Oct. 1. The board voted to spend $5.8 million from the health insurance plan's reserves in the 2011 fiscal year.

At a previous meeting, state Finance Director Bill Newton had proposed that the cost of state employees premiums be raised from $15 to $25 a month and from $190 to $200 a month for employees whose dependants are covered by state insurance. The board rejected that proposal.

Newton had argued that the board did not have enough money to sustain the current program in future years without a revenue increase or by cutting expenses.

Gov. Bob Riley is serving in the final months of his eight-year term and voters will elect a new governor in November. Retirement Systems of Alabama CEO David Bronner voted for leaving state employee premiums the same and suggested making as few changes to the program as possible until a new governor -- either Republican Robert Bentley or Democrat Ron Sparks -- takes office in January.

"It doesn't need to be changed by this board right now. We've got to let the next governor look at the entire picture," Bronner said.