In a letter from Kentucky’s Personnel Cabinet to state employees, officials have noted that the Kentucky General Assembly’s proposed budget, House Bill 500, has been filed, and — if passed — will have “a devastating impact” on all Kentucky Employee Health Plan members and their dependents.
According to the letter, the KGA is proposing a 5% cap on employer contribution to health insurance cost — which will reportedly create “drastic financial shortfalls” to the plan of $77 million in 2027 and $202 million in 2028.
Also according to the letter, there are only two ways to make up the shortfall: increase employee premiums, or decrease coverage.
In addition to theoretical increases of employee premium costs, the plan will also be required to increase deductibles/coinsurance percentages, out-of-pocket maximums, and prescription costs, and certain medical treatments and prescriptions will have to be removed from coverage in order to cover the shortfall.
The letter provides four examples of net pay for current employees, and HB 500’s limitations would impact earners:
Correctional Officer currently has a monthly net of $1,815.50, but would see a decrease of $425.88.
Social Worker currently has a monthly net of $2,948.52, but would see a decrease of $425.92.
LRC Employee currently has a monthly net of $4,405.58, but would see a decrease of $239.78.
And an AOC Employee currently has a monthly net of $2,181.88, but would see a decrease of $477.64.
Per the letter, Governor Andy Beshear is “deeply concerned,” because it “drastically differs” from his recommended budget, and Personnel Cabinet leadership has already communicated these concerns to legislators, in hopes that they will do the “right thing,” and prioritize the health and wellness of state employees and teachers under the plan.
Jason Bailey, executive director of Kentucky Center for Economic Policy, noted on his social media Monday the Kentucky Legislature has pulled more than $1 billion from the Kentucky Employees Health Plan, over several years, in order to balance the state’s budget.
According to him, “that money would otherwise be there to help cover [these] costs.”
The KCEP also announced Monday that Kentucky teachers could see a $486 monthly cut in health benefits, bus drivers could see a $535 monthly cut, and Kentucky State Police troopers could see a $394 monthly cut.
Christian County’s Myron Dossett, as well as other legislators, have cautioned this is still a working budget session.
