No health insurance rate hikes for Kansas state employees in 2020. It’s a big change

Thousands of Kansas state employees won’t pay more for health insurance in 2020 for the first time in years after rounds of rate increases ratcheted up financial pressure on families.

Employee contribution rates for health coverage will drop or remain flat next year, following a vote Monday by a key state commission. More than 39,600 people are enrolled in the plans.

Some state government employees are contributing about double what they did just four years ago. Kansas shrank how much funding it provided for health coverage amid budget turmoil, but tax revenues are again climbing.

“This is an excellent start to checking the years of out-of-control increases to health insurance provided to State of Kansas employees by their employer as a benefit -- a benefit that employees became largely unable to afford,” Sarah LaFrenz, president of the Kansas Organization of State Employees, said in a statement.

The Kansas State Employees Health Care Commission set employee contribution rate increases for 2020 at zero percent for employee-only and employee-and-children plans. The commission gave a 6 percent decrease to workers in employee-and-spouse and employee-and-family plans.

That’s a sharp reversal from past years. Employee-and-spouse and employee-and-family plans both saw rate increases greater than 30 percent each year from 2016 to 2018.

Employees probably found past rate increases “shocking,” Insurance Commissioner Vicki Schmidt said.

“There was no way an employee could have even begun to plan for those types of increases,” Schmidt said.

For years, state employees and their advocates argued the rate hikes continually cut into their paychecks. Before 2017, state employees had gone nearly a decade without an across-the-board pay raise.

LaFrenz contends that if Kansas wants to attract and retain the best workers, it must make sure insurance increases don’t result in de facto pay cuts.

“It’s to the point where it’s unaffordable to work for the State of Kansas, and that isn’t sustainable,” LaFrenz said.

Rep. Stephanie Clayton, D-Overland Park, said in a series of tweets Monday that she and many other lawmakers receive health insurance through the state.

“Because the premiums went up so much, the cost of our insurance exceeded our wages, putting us in arrears. Many of us (myself included), actually pay to work,” Clayton said, while noting that lawmakers don’t deserve the same sympathy as state employees.

The rate reductions come after changeover on the commission caused by the November election. Gov. Laura Kelly effectively controls four of the panel’s five seats. This is the first time the commission has set rates under Kelly.

Kelly said in a statement that the high costs of the plans had been inflated to help pay for tax cuts. The policies often forced employees to decide between basic health care for their children and other necessities, she said.

“It is no way to live,” Kelly said.

Steve Dechant, a retiree who serves on the commission, cautioned that Kansas needs to pursue stability when it comes to insurance rates. He warned against large increases or decreases so that employees have a better sense of what to expect in any given year.

“I have a feeling that we’re not going to be able to do too much of this very long and we need to recognize that,” Dechant said of rate decreases.

Even though employee contribution rates will hold steady or fall, the state will increase its own contribution rate by 4.5 percent. In total, Kansas is expected to have $48 million in its health insurance reserve fund this year under the changes.

The reserve fund dropped precipitously in previous years, from $210 million in 2014 to just $24 million in 2017. The commission’s 2018 annual report said that it made a decision to reduce the balance beginning in 2015, but didn’t offer an explanation.

This story was originally published June 3, 2019 at 5:58 PM.