Health hub staff to get payments when laid off

Employees who will be laid off when the agency responsible for Arkansas’ health insurance exchange is dissolved stand to receive severance payments ranging from $4,600 to $17,500, records show.

The highest payment, $17,573, would go to Chris Hopper, the Arkansas Health Insurance Marketplace’s director of operations, whose salary is $177,529.

Two other employees also would receive payments exceeding $10,000.

They are Deputy Director Tangelia Marshall, who will receive $14,248, and Finance Director Tony Beeler, who will receive $13,842.

The amounts are equal to four to seven weeks of pay for each employee, depending on how long the person has worked for the agency.

The amounts also include the equivalent of one month’s premiums for the employee’s health, vision and dental benefits, which are set to end Feb. 28.

In addition, the employees will be paid for their unused paid time off. As of Feb. 8, employees stood to receive payments ranging from $252 to $1,024, based on their unused time.

Mike Castleberry, chairman of the marketplace’s board of directors, said the severance policy was created by Angela Lowther, who stepped down as the marketplace director last month, under her authority to manage the agency’s staff.

Lowther gave notice Jan. 24 her resignation will take effect Feb. 21. She will not receive a severance payment.

Former Rep. Nate Bell, who was hired as the marketplace’s interim director, is working as a contract employee and also won’t receive severance.

Castleberry said he first saw the policy when the board met in a closed session last week to discuss the termination of the agency’s staff.

The policy, which Castleberry said didn’t require board approval, wasn’t publicly disclosed during the meeting.

The agency provided copies of the severance agreements to the Arkansas Democrat-Gazette this week in response to a request under the state Freedom of Information Act.

Castleberry said the marketplace was created as a nonprofit entity to “act and work like a business” and the payments are comparable to what private companies offer.

“Nobody’s going to be able to retire on this,” Castleberry, an executive with Healthscope Benefits in Little Rock, said. “This is really just going to allow people to have a month or so, maybe two, until they can find anther job.”

Gov. Asa Hutchinson thinks the policy “seems reasonable, and he supports it,” spokesman J.R. Davis said.

The marketplace’s impending extinction as a separate entity stems from Senate Bill 113, which became Act 107 after it was signed Wednesday by Hutchinson.

When it takes effect March 15, the law will transfer responsibility for the health insurance exchange from the marketplace to the Insurance Department and abolish the marketplace’s board.

The legislation’s sponsor, Sen. Jason Rapert, R-Conway, said he hadn’t heard about the severance policy.

“Ultimately, [the Arkansas Health Insurance Marketplace] is controlled by a board of directors, and hopefully they are ensuring that whatever is being done there is reasonable,” he said.

Created by the Legislature in 2013, the marketplace certifies the plans sold in the state through healthcare.gov and helps consumers enroll.

Insurance Commissioner Allen Kerr has said his agency can take over those duties at a cost of no more than $571,500 a year while eliminating the portion of a fee charged to insurance companies supporting the marketplace’s operations.

The marketplace’s spending totaled about $2.6 million last year. Its portion of the fee is equal to 1.25 percent of the premiums for the plans sold on healthcare.gov.

A portion of the fee equal to 3 percent of the premiums, which goes to the federal government to support the website, wouldn’t be affected by Act 107.

The severance payments are substantially higher than those offered by agencies under the state’s reduction-in-force policy.

With approval from the state’s chief fiscal officer, that policy allows agencies to offer payments of $800 to employees with one to five years of service, $1,200 to those with five to 15 years of service and $1,600 to employees with more than 15 years of service.

The Insurance Department offered such payments in 2015, when it transferred some of its responsibilities to the marketplace as part of the shift from having a federally run health insurance exchange to a statebased exchange.