Premiums

Frequently Asked Questions

Premiums

The following frequently asked questions about premiums are not meant to be exhaustive. Refer to your health benefits plan book or contact the SEIB for more information.

How is the State Employees’ Health Insurance Plan funded?

The State Employees’ Health Insurance Plan (SEHIP) is funded by contributions from the state and through employee premiums, deductibles, and copays.

What is the state funding rate?

The state funding rate is a funding mechanism established by the Alabama Legislature to help fund the state health plan. The rate is a dollar amount paid monthly by state agencies for each active fulltime employee. The state funding rate is $930 per employee per month.

Is the state funding rate equivalent to an employee premium?

No, it is not the equivalent of an employee premium. The state funding rate is paid by the employer to cover the cost of an active employee and subsidizes retiree and dependent coverage.

What is the employer contribution?

The employer contribution is the amount state agencies pay for each active fulltime employee based on the state funding rate. The employer contribution can be broken down into an equation: the state funding rate x number of active employees x 12 months = annual employer contribution.

What is the employee premium?

The employee premium is the amount the SEIB establishes for employees and retirees to contribute to the cost of their coverage. The single employee premium is $140 per month. This can be reduced by participating in the the ACHIEVE Wellness program (up to $50 in monthly premium discounts) and refraining from using tobacco products ($60 monthly premium discount), which brings the total single employee premium to $30 per month when all of the discounts are applied. For a complete listing of the employee premium rates visit Rates for 2022.

How are premiums determined?
The SEIB establishes premiums for each class of employees and retirees. There are eight premium classes:
  • active employe, single
  • active employee, family
  • non-Medicare retiree, single
  • non-Medicare retiree, family
  • Medicare retiree, single
  • Medicare retiree, dependent
  • non-Medicare retiree with Medicare dependent
  • Medicare retiree with non-Medicare dependent(s)
Are employees responsible for any other costs?

In addition to the employee premium, members are also responsible for out-of-pocket expenses such as copays and deductibles. Members should refer to the employees’ health benefits plan book to determine what your out-of-pocket expenses will be prior to receiving services from your health care provider.

Spousal Surcharge

Is there an additional employee surcharge if I cover my spouse?

Yes. Employees and retirees whose spouse is enrolled in the SEHIP will be charged a $50.00 per month surcharge if that spouse is eligible for other group health benefits through his/her employer.

Can the spousal surcharge be waived?
Yes. The spousal surcharge can be waived if one of the following conditions is met:
  • The covered spouse is eligible for other group health benefits through his/her employer, but the premium for single coverage under the lowest cost option offered by the spouse’s employer is more than $255 per month. (Note: the Marketplace, Medicare, Medicaid and Tricare are not considered other employer group health benefits.) Documentation required: A letter from the covered spouse’s employer verifying that the monthly premium for the lowest cost single coverage option is more than $255.
  • The covered spouse is employed, but is not eligible, or not offered, group health benefits through his/her employer. Documentation required: A letter from the covered spouse’s employer verifying that the spouse is not offered group health benefits.
  • The covered spouse is unemployed or retired and not covered nor is eligible for any other employer group health benefits. Documentation required: A copy of the most recent federal or state tax return listing the covered spouse’s employment status. Only the first two pages of the return that shows the name of employee and spouse and the spouse’s occupation need to be provided. All other information on the tax return can be blacked out. On State Form 40 and Federal Form 1040, that information is found on the top of page 1 (your name and your spouse’s name) and the bottom of page 2 (your spouse’s signature and occupation). If you file a Federal Form 1040EZ, that information is found on the top of page 1 (your name and your spouse’s name) and the bottom of page 1 (your spouse’s signature and occupation). If your unemployed spouse files a separate tax return, he/she must submit his/her return showing the same information. Note: If your spouse became unemployed or retired after the most recent federal or state tax return was filed, you must submit an Unemployed or Retired Spouse Verification form (IB27) verifying that your spouse is currently unemployed or retired and not covered or eligible under any other employer group health benefits.
  • For new employees only – the spouse’s current or former employer offers group health benefits, but the enrollment rules of your spouse’s health plan do not allow your spouse to enroll for coverage at the time of your employment. A waiver is available until the earliest date that your spouse can enroll. Documentation required: A letter from your spouse’s current or former employer verifying its enrollment rules.
How do I apply for the spousal surcharge waiver?

To apply for a spousal surcharge waiver you must submit a Spousal Surcharge Waiver Application (Form IB25) to the SEIB. The waiver is on a prospective basis only and the SEIB will not make refunds for previous health premiums. The effective date of the waiver of the spousal surcharge will be the first day of the month following approval of the waiver. The waiver will be effective for 12 months. Thereafter, re-certification must be made annually.

Employees have 60 days from their enrollment date to apply for the spousal surcharge waiver. Covered spouses of active employees, non-Medicare retirees and non-Medicare covered spouses of retirees have 60 days from their initial effective date of coverage to apply for the spousal surcharge waiver.