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Kentucky Takes $63 Million From State Employee Health Fund to Fill Budget Gap

A bill amending the state budget unveiled in the session's final hours authorized the transfer from the health insurance fund to government's "rainy day" fund where it will allow the state to pay for appropriations made this session.

In one of the final actions of the 2015 General Assembly early Wednesday morning, Kentucky lawmakers raided the balance in the public employee health insurance fund for $63.5 million.

A bill amending the state budget unveiled in the session's final hours authorized the transfer from the health insurance fund to government's "rainy day" fund where it will ensure the state has money to pay for a few special appropriations made this session.

Those appropriations include up to $10 million needed to cover a shortfall in public school funding announced earlier this year, $10 million in 2015-16 to fund the new law to combat heroin abuse and $7.8 million to help cover losses due to declining gas tax revenues to county and city road programs.

The action frustrated leaders of public employee groups.

"Those savings should have been left alone and used to avoid future premium increases and/or benefit reductions, ..." said Brent McKim, president of the Jefferson County Teachers Association. "We are a self-insured fund. ... Money saved in one cycle can affect the plan design and costs in the next."

 

Daniel Luzer is GOVERNING's news editor.