Alabama's State Employee Insurance Board approved increases in employee premiums for the next year.
The board had mulling changes to its policies for the past few months, with projected shortfalls hanging over the SEIB for fiscal years 2014 and 2015.
William Ashmore, the board's CEO, pushed for the change and described the compromise proposal as the, "lesser of two evils."
"No one wants to be in a situation a year from now where the program is facing bankruptcy so what the board was doing today was making some decisions so we can prevent the financial crisis down the road" Ashmore said.
The increases are $5 for each plan, individual and family. The increase will bring the 2014 premiums to $90 and $280 respectively, both well below national averages for insurance premiums. The board also approved dental coverage premium increases of $3 for individuals and $8 for families.
The decisions to increase premiums weren't met without some resistance.
Faye Nelson, a current state employee and member of the board said she was opposed to any increases, even with deficits of $36 million projected for 2014 and $55 million projected for 2015.
"State employees have been through enough" Nelson said. The premium hikes were approved on a voice vote. Nelson was the only board to speak out against the proposal.
Alabama's general fund budget will increase funding for the employer contribution to state employees' insurance programs to $825, up from $765 the year before. But future increases for health insurance are unlikely, said Ashmore, the SEIB's CEO.
"What we're looking at is not only getting through this year but we're also looking at a two year plan because our concern is that there's not going to be any more additional money coming from the state next year" Ashmore said.
The premium increases are also closer in line with new recommendations under the Affordable Care Act, which is set to go to into effect January 1.
SEIB governed plans cover approximately 90,000 lives in Alabama. The new rates will take effect January 1, 2014.
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