Alabama Teachers' Life Insurance: What's Covered?

Alabama teachers are highly valued by the state, which provides them with a range of benefits and safety nets. These include access to affordable health insurance and retirement plans. While it is not clear if Alabama teachers have life insurance, they do have access to health insurance and retirement plans. The Public Education Employees' Health Insurance Plan (PEEHIP) is administered by Blue Cross and Blue Shield of Alabama and covers both individuals and families. Additionally, Alabama teachers are automatically enrolled in a statewide retirement plan, the Alabama Teachers Retirement System (TRS), which allows them to contribute a portion of their monthly earnings towards their retirement. They can also take advantage of complimentary life insurance offered by the NEA Members Insurance Trust to eligible members.

Alabama teachers' health insurance

Alabama teachers are highly valued by the state, which provides them with benefits and safety nets that motivate them to stay in the system. One of these benefits is access to affordable health insurance. After gaining employment in an Alabama school district, teachers can access the Public Education Employees' Health Insurance Plan (PEEHIP).

The PEEHIP is administered by Blue Cross and Blue Shield of Alabama and covers both individuals and their families. For individuals, the overall deductible is $300, while families have a deductible of $900 for major medical services. Under the basic plan, there is also a deductible of $200 per person per hospital stay. The out-of-pocket limit for an entire year of coverage is $400 per person for major medical services. This does not apply to premium costs, copays, out-of-network coinsurance, or deductibles.

The PEEHIP also assists with the cost of prescription drugs. For generic drugs, there is a $6 copay for a 30-day supply or a $12 copay for a 90-day supply. Preferred brand drugs cost $40 for a 30-day supply and $80 for a 90-day supply.

There are some procedures and medical benefits that are not provided under the basic PEEHIP plan. These include insurance premiums for the year, full-time employees in Alabama public institutions of education, spouses of employees, and children of employees under the age of 26. However, teachers can add optional coverage to their plans, including dental and vision. Some of these optional plans include $250 per day in-patient benefits for the first 90 days of hospital confinement ($500 per day thereafter) and a $10,000 maximum charge for a lifetime of X-ray therapy or chemotherapy injections.

The PEEHIP covers about 350,000 members and their dependents, including about 80,000 retirees and dependents covered by the PEEHIP's Medicare Advantage plan. The total funding for PEEHIP in fiscal year 2023 was $1.5 billion, with taxpayers providing $987 million (64%) and members paying $388 million (25%). Due to changes in federal policy, PEEHIP has requested a $130 million increase in funding from the Legislature for fiscal year 2026.

Retirement plans

Alabama teachers are automatically enrolled in a statewide retirement plan designed specifically for educators. The Alabama Teachers' Retirement System (TRS) is a defined-benefit program that guarantees teachers a certain amount of money in the form of a pension upon retirement. This is a valuable benefit as many private employers no longer offer such plans.

Under the TRS, teachers contribute a portion of their monthly earnings to a statewide fund that will help pay for their retirement. As of 2012, enrollment in the program is mandatory, with teachers contributing 7.5% of their paychecks each month. This percentage can be changed by the Alabama Legislature; for example, in 2011, the contribution rate increased from 5% to 7.25%.

To be eligible for retirement under the TRS, teachers must meet one of the following conditions:

• 10 years of service and 62 years of age or older
• 25 or more years of service at any age

Once eligible for retirement and upon termination of employment, teachers will receive monthly retirement paychecks for life. The amount of these paychecks is adjusted by several factors, including a "benefit factor" of 1.65%. The maximum monthly retirement benefit can be calculated using the following formula:

> Average Final Salary x Years and months of service x Benefit Factor / 12

For example, if a teacher retires after 27 years and 6 months with an average final salary of $42,000, they would receive monthly checks of $1,937.03.

Teachers hired before 2013 and with at least 10 years of service can retire at age 60 or at any age after 25 years of service. Those hired after 2013 will not be eligible for a pension until they have served for 10 years and reached the age of 62. This means that teachers who start their careers in their early 20s can retire in their 40s and often begin collecting pensions while starting a second career.

In addition to the TRS, all eligible employees of Auburn University in at least a 50% time capacity are required to join the Retirement Systems of Alabama (RSA). This program provides specific benefits for eligible members, in accordance with the plan or option designated by the member at the time of application for retirement. All contributions to the RSA are tax-deferred until retirement or withdrawal from the plan.

The RSA separates earnable compensation into base pay and overtime pay. Base pay includes regular pay, lead pay, shift differential, additional compensation ("Z" jobs), out-of-class pay, overload, professorships, and salary supplements. Overtime pay includes overtime, additional compensation not related to the current position, and contracted bonuses.

For Tier 1 members (those who joined before January 1, 2013), only overtime pay that does not exceed 20% of base pay is included. Tier 1 members have a payroll deduction of 7.5% of earnable compensation and are eligible for retirement benefits at age 60 with at least 10 years of service.

For Tier 2 members (those who joined on or after January 1, 2013), only overtime pay that does not exceed 25% of base pay is included. Tier 2 members have a payroll deduction of 6.2% of earnable compensation and are eligible for retirement benefits at age 62 with at least 10 years of service. There is now an early retirement option for Tier 2 members after accumulating 30 years of service credit, with a 2% reduction for each year from age 62.

Cost of living

Alabama teachers have access to the Public Education Employee's Health Insurance Plan (PEEHIP), which is administered by Blue Cross and Blue Shield of Alabama. This insurance plan covers both individuals and families, with varying deductibles and out-of-pocket costs depending on the specific plan and the number of dependents. For example, under the basic plan, individuals have an overall deductible of $300, while families have a deductible of $900 for major medical services. Additionally, individuals pay a deductible of $200 per hospital stay, and the out-of-pocket limit for major medical services is $400 per person per year.

The average cost of health insurance for a single Alabama teacher is relatively low compared to other employees in the state. Teachers pay approximately $15 per month or $180 per year for individual coverage, while the average cost for a single employee in Alabama is about $103 per month or $1,233 per year. Family coverage is also more affordable for teachers, costing $177 per month or $2,124 per year, compared to an average of $350 per month or $229 for a spouse-only plan in the state.

Alabama teachers also benefit from a fixed retirement system, with the Teachers' Retirement System (TRS) allowing them to contribute a portion of their monthly earnings towards their retirement. As of 2012, enrollment in the TRS program is mandatory, with teachers contributing 7.5% of their paychecks each month. To be eligible for retirement, teachers must meet one of the following conditions:

10 years of service and be 62 years or older, or have 25 or more years of service at any age.

The monthly retirement paychecks are adjusted by factors such as a "benefit factor" of 1.65%, and the maximum monthly benefit can be calculated using a specific formula. For example, a teacher retiring after 27 years and 6 months with an average final salary of $42,000 would receive monthly checks of $1,937.03.

While the base pay for Alabama teachers is determined by the state and is based on their level of education and years of service, there are districts that choose to pay more. Additionally, teachers can supplement their income through government programs that provide additional benefits and peace of mind regarding their health and future.

Average teacher salaries

In Alabama, the average salary for a public school teacher is $54,101 per year, with the highest pay reaching $76,838 and the lowest $37,023. However, most teachers earn between $45,162 and $66,002. An entry-level public school teacher with under one year of experience can expect to make around $51,051, while a teacher with 8 or more years of experience can expect to make an average of $60,183.

The average hourly wage for a teacher in Alabama is $12.47, and the average monthly salary is $2,769. The average annual salary for a school teacher in Alabama is $33,232 as of July 2022, with salaries ranging from $17,089 to $64,085.

Alabama's Retirement Systems (RSA) offers a mandatory retirement program for eligible employees, including teachers, which provides specific benefits based on the plan chosen at the time of application for retirement. The Teachers' Retirement System (TRS) is a part of the RSA and is mandatory for non-student employees working for a year in at least a 50% capacity on a continuing basis. Those appointed temporarily for no longer than a year may be exempt.

Teachers in Alabama also have access to health insurance benefits through the Public Education Employees' Health Insurance Plan (PEEHIP), which was established in 1983 to provide quality healthcare insurance to its members.

Additional benefits

Alabama teachers are highly valued by the state, which provides them with assurances and safety nets that motivate them to stay in the system. The state offers a range of additional benefits to its teachers, including:

Retirement Plans

Alabama teachers are automatically enrolled in a statewide retirement plan designed specifically for educators. The Alabama Teachers Retirement System (TRS) is a defined benefit program that guarantees teachers a certain amount of money in the form of a pension at retirement. Teachers are required to contribute a portion of their monthly earnings to the TRS, with the current rate set at 7.5% of their paychecks. This rate has changed over time, increasing from 5% in 2011 to 7.25% in 2012. Teachers who were hired before 2013 and have worked in the system for at least 10 years can retire at 60 or at any age after 25 years of service. Those hired after 2013 must serve for 10 years and reach the age of 62 to be eligible for a pension. The monthly retirement paychecks are adjusted by factors such as a "benefit factor" of 1.65%.

Health Insurance

Alabama teachers have access to the Public Education Employee's Health Insurance Plan (PEEHIP), administered by Blue Cross and Blue Shield of Alabama. PEEHIP covers both individuals and families, with varying deductibles and out-of-pocket limits. The plan assists in making prescription drugs more affordable, with copays for generic and preferred brand drugs. While the basic PEEHIP plan may not cover all services, optional plans are available that include dental and vision coverage. Additionally, PEEHIP ensures full coverage across the state by only partnering with participating healthcare facilities.

Life Insurance

Alabama teachers may be eligible for complimentary life insurance offered by the NEA Members Insurance Trust. This coverage is provided at no cost to eligible NEA members and includes life and accidental death and dismemberment insurance. The coverage amount varies based on the circumstances, with $1,000 of life insurance and up to $5,000 of accidental death and dismemberment coverage. Additionally, there is a $50,000 benefit for accidents occurring on the job or while serving as an Association Leader, and a $150,000 benefit for unlawful homicide while on the job.

Other Benefits

Alabama teachers enjoy ample vacation time and the opportunity to make a difference in the lives of children and train the next generation of leaders. They also have access to government programs that can help prepare them for the future, whether it be early retirement or peace of mind regarding their health.

Frequently asked questions