Employee Benefits Division outlines contract renewals, actuarial projections and $52M COVID cost recovery request
April 28, 2022 | Arkansas State Treasurer's Office, Arkansas
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Jake Blea, administrator of the Employee Benefits Division (EBD), briefed the Board of Finance on EBD contracting, actuarial projections and pandemic‑related costs. Blea requested approval to renew four vendor contracts (EBRx, Mainstream, Optum, MedImpact) through the next contract periods and explained that Mainstream requested a 4% increase in its hourly rate (from $125 to $130). The board approved the contract renewals by voice vote.
Blea also asked the board to authorize drafting two RFPs: one to separate and secure a direct actuary (rather than bundling actuarial services with the third‑party administrator) and one to replace or renew the Employee Assistance Program vendor. He said the Milliman actuarial firm prepared five‑year projections for the PSE and AFT plans and highlighted that state contributions for 2022 are projected at about $180,000,000, an increase from prior years as a result of recent legislative action. Blea told the board that per‑employee funding (PPE) for PSE increased from about $108,000,000 to $187,000,000 between 2022 and 2023, reflecting General Assembly changes that raised per‑employee contributions.
On reserves, Blea noted the PSE plan’s reserve rose to about 31% of expense after the legislative funding changes; the law requires reserves be maintained between roughly 12%–16%. Blea cautioned the board that projections show the reserve could fall again by 2027 and stressed the need to manage volatility going forward.
Blea reported EBD has identified roughly $52,000,000 in pandemic‑related costs over the prior year tied to testing, vaccinations and telemedicine; he said approximately $31,000,000 of that was for public school employees and $21,000,000 for state employees. EBD is working with the Department of Finance and Administration to request reimbursement from American Rescue Plan (ARP) funds; Blea said the office is awaiting the next federal tranche and will seek formal consideration when timing allows.
Blea said EBD will submit the Act 113 statutory report to the legislature (ALC) with monthly breakdowns and that the office intends to provide quarterly updates going forward. The board voted to accept Blea’s report and to forward the required report to the legislature.
Blea also asked the board to authorize drafting two RFPs: one to separate and secure a direct actuary (rather than bundling actuarial services with the third‑party administrator) and one to replace or renew the Employee Assistance Program vendor. He said the Milliman actuarial firm prepared five‑year projections for the PSE and AFT plans and highlighted that state contributions for 2022 are projected at about $180,000,000, an increase from prior years as a result of recent legislative action. Blea told the board that per‑employee funding (PPE) for PSE increased from about $108,000,000 to $187,000,000 between 2022 and 2023, reflecting General Assembly changes that raised per‑employee contributions.
On reserves, Blea noted the PSE plan’s reserve rose to about 31% of expense after the legislative funding changes; the law requires reserves be maintained between roughly 12%–16%. Blea cautioned the board that projections show the reserve could fall again by 2027 and stressed the need to manage volatility going forward.
Blea reported EBD has identified roughly $52,000,000 in pandemic‑related costs over the prior year tied to testing, vaccinations and telemedicine; he said approximately $31,000,000 of that was for public school employees and $21,000,000 for state employees. EBD is working with the Department of Finance and Administration to request reimbursement from American Rescue Plan (ARP) funds; Blea said the office is awaiting the next federal tranche and will seek formal consideration when timing allows.
Blea said EBD will submit the Act 113 statutory report to the legislature (ALC) with monthly breakdowns and that the office intends to provide quarterly updates going forward. The board voted to accept Blea’s report and to forward the required report to the legislature.
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