decaturdaily.com · Trisha Powell Crain Alabama Daily News · September 8, 2026
PEEHIP to seek $222 million funding increase as state budget pressures grow | State | decaturdaily.com
# PEEHIP to seek $222 million funding increase as state budget pressures grow
- By Trisha Powell Crain Alabama Daily News - Sep 8, 2026 - 41 mins ago - 0
Poole
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BIRMINGHAM — Alabama’s health insurance program for public education employees plans to ask lawmakers for about $222 million in additional funding next year as rising health care costs continue to strain the program’s finances.
The Public Education Employees Health Insurance Program’s Board of Control last Tuesday approved a request for just over $1.5 billion in state funding for fiscal 2028, up from $1.3 billion for fiscal 2027.
If lawmakers approve the request, that would raise the employer contribution rate from $1,048 to $1,226 per active education employee per month. PEEHIP officials said there are about 104,000 active members.
“We’ve had a remarkable run with the ability to contain costs for an extended period of time,” Poole said. “But with inflationary costs of healthcare increasing, that’s creating significant headwind.”
Even though PEEHIP is funded through the Education Trust Fund, Poole said pressure on the General Fund matters because lawmakers will be weighing the health insurance needs of both education employees and state employees as they build the state’s two budgets.
The rate paid by participating education employers, including K-12 public school systems, community colleges and three public universities, remained at $800 per active employee per month from fiscal 2017 through fiscal 2025. It increased to $904 in fiscal 2026 and will rise to $1,048 in fiscal 2027.
The fiscal 2028 request assumes lawmakers provide the full additional amount and that no money is withdrawn from the retiree trust for that year. If lawmakers provide less, PEEHIP officials could again turn to the trust or make changes to the health plan to close the gap.
Scott clarified that PEEHIP would still be able to pay benefits without the additional $25 million, but its working capital reserve would fall below the board’s required level and the program probably would not pass its audit.
Poole
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