State employees will pay more due to cut budget

Sept. 23--State employees in Alabama will pay $15 more per month for health insurance next year due to cuts in the state budget, officials of the State Employee Insurance Board said Tuesday.

"It was a really bad day," Liane Kelly, said a lobbyist for the Alabama Retired State Employees Association.

Gov. Robert Bentley signed a $1.75 billion General Fund budget into law on Sept. 17, less than two weeks before the start of the 2016 fiscal year. That budget bill marked the end of a six-month impasse over how to fill a projected $200-million-plus gap in the General Fund, the state's budget for non-school agencies.

Despite the passage of a $60 million, 25-cent-per-pack sales tax, lawmakers still had to cut the budget by $83 million, and state agencies are just beginning to assess the downstream effect of those cuts.

The budget didn't provide any increase in the state's contribution to health insurance for its roughly 30,000 employees. That raised the possibility that the State Employee Insurance Board would vote to raise the employee contribution for insurance.

The board met today and confirmed a $15-per-month increase, effective next calendar year. That increase would affect both current and retired employees, SEIB governmental affairs director Sally Corley said, for a total of about 50,000 people.

The change wouldn't affect school employees, who are part of a separate health care system.

Lawmakers were aware of a potential increase in employees' costs last week when they debated the budget. Senate budget committee chairman Arthur Orr, R-Decatur, said at the time that Alabama has a low employee contribution compared to other Southeastern states and the increases would bring the state toward the regional median.

"The Legislature gave clear direction in the budget that state employees should pay more for health insurance," SEIB director William Ashmore was quoted as saying in a prepared statement released Tuesday.

Kelly, of the retired employees' group, said the board faced the option of increasing the monthly premium or changing the state's prescription benefit so that employees pay for their medications up front and seek reimbursement later. That change would have been "devastating," she said.

"A premium increase was the best of two evils," she said.

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