Alabama educators’ health insurance plan requests American Rescue Plan funds for COVID-19 costs

The Alabama Public Education Employees’ Health Insurance Plan is asking lawmakers for a share of the state’s remaining federal dollars from the American Rescue Plan Act to cover the cost of medical expenses from the COVID-19 pandemic.

PEEHIP wrote letters to legislative budget chairs in August requesting $84 million from ARPA, a pandemic relief bill passed by Congress last year.

The state received $2 billion from ARPA in two equal portions. In January, lawmakers approved a plan to spend the first half, leaving $1 billion still to appropriate.

The request for ARPA money is not the first from PEEHIP. In January, PEEHIP asked for $57 million for COVID-19 costs from March 2021 through December 2021. The Legislature did not approve that.

The $84 million is an updated request covering COVID-19 related expenses from March 2021 through July 2022. That includes the cost of testing, diagnosing, and treating the virus, as well as vaccinations.

Today, PEEHIP Chief Financial Officer Diane Scott made a presentation on COVID costs and other issues at a meeting of the PEEHIP Board of Control.

Overall, COVID-19 costs to PEEHIP from the start of the pandemic through July were about $131 million. The insurance program received $29 million from a previous federal COVID package, the CARES Act.

Rep. Steve Clouse, R-Ozark, chair of the House General Fund budget committee, said PEEHIP’s request for ARPA funds would receive strong consideration but said it was too soon to say whether he expected it to be approved.

“There’s a whole list of requests,” Clouse said. “It certainly will be a high priority.”

The Legislature will not meet in regular session until March. Clouse said he expects a special session on ARPA funds sometime between the inauguration in January and the regular session.

Congress provided states some flexibility on how they can use ARPA funds. The Alabama Legislature allocated $400 million from the first half of the state’s ARPA money to help build new prisons in Elmore and Escambia counties. Other portions were allocated to the expansion of broadband internet access, water and sewer projects, the state’s unemployment compensation trust fund, hospitals and nursing homes, and other purposes.

Aside from the request for ARPA funds, Scott said PEEHIP is keeping its funding request to the Legislature level for the eighth straight year, at $800 per month, per active employee. That would be for fiscal year 2024, which starts Oct. 1, 2023, and would be a total of about $967 million.

Scott showed the PEEHIP Board a projection that indicated the program could need an increase to as much as $853 per employee per month in fiscal year 2025. She said if the Legislature approves the ARPA request that it is less likely that an increase will be needed in 2025.