HB 21-SCHOOL/UNIVERSITY EMPLOYEE HEALTH INSUR  4:35:13 PM CHAIR SUMNER announced that the next order of business would be HOUSE BILL NO. 21, "An Act relating to group insurance coverage and self-insurance coverage for school district employees, employees of the University of Alaska, and employees of other governmental units in the state; and providing for an effective date." 4:35:51 PM REPRESENTATIVE SARAH VANCE, Alaska State Legislature, as prime sponsor, presented HB 21 via a PowerPoint presentation, titled "HB 21 School Healthcare Consolidation" [hard copy included in the committee packet]. She turned attention to slide 2 regarding what drives the cost of public education in Alaska. She explained that the three biggest factors are funding for small schools in rural areas, energy costs, and healthcare plans for school district employees. REPRESENTATIVE VANCE continued to slide 3 through slide 5 and stated that Alaska has the highest per capita healthcare costs in the U.S. She pointed out that Alaska's unadjusted per-pupil spending on teacher salaries cost is 14th in the nation; however, after adjusting for the cost of living, the amount moves to 23 percent below the national average. She further pointed out that Alaska's unadjusted per-pupil spending on the education system's employee benefits is 64 percent above the U.S. average; however, it is only 9 percent above the average when adjusted for cost of living. 4:40:31 PM RANDY TRANI, PhD, Superintendent, Matanuska School District, Palmer, Alaska, informed the committee that a change in teacher healthcare benefits would require a change in the collective bargaining agreement. He expressed the opinion that a plan which offers group insurance policies would reduce the cost. 4:42:19 PM REPRESENTATIVE PRAX asked whether the school board would support the idea. DR. TRANI answered that wages and insurance are often the biggest parts of collective bargaining. If the bill were passed, the board would be able to consider the idea for the next collective bargaining agreement. In response to a follow- up question, he said the board would look at the state's collective bargaining agreements to ensure that they are comparable. 4:44:29 PM REPRESENTATIVE RUFFRIDGE asked what the cost of insurance per person is in the Matanuska-Susitna Borough School District. DR. TRANI answered that it is $2,000 a month for teachers. The teachers pay between $4,000 and $6,000 per month, for a total annual cost of $28,000 to $30,000. REPRESENTATIVE RUFFRIDGE asked what the cost is on a state level. 4:47:02 PM BETSY WOOD, Chief Health Administrator, Division of Retirement and Benefits, Department of Administration, answered that the state pays a healthcare contribution of $1683 per employee, per month. She said that there is a range which depends on the number of people being covered by the state employee's plan. 4:48:24 PM REPRESENTATIVE FIELDS asked whether there is a model which considers Alaska Care. MS. WOOD answered that the division has a model, although it is older. She added that if the bill were to reach the House Finance Committee, further analysis would take place. In response to a follow-up question, she said that the exact cost to Alaska Care is unknown. REPRESENTATIVE FIELDS asked whether there are other opportunities to achieve an economy of scale. MS. WOOD answered that she is unaware of other possibilities, but offered her opinion that it is likely. 4:52:52 PM REPRESENTATIVE PRAX asked whether it is correct that an actuarial analysis only begins when a bill reaches the finance committee. MS. WOOD answered yes. In response to a follow-up question, she said that the analysis would likely take a few weeks to be completed. 4:54:03 PM REPRESENTATIVE VANCE commented that the bill still requires contributions from those who opt into the new plan, which would prevent the state from having a larger burden. [HB 21 was held over.]