MONTGOMERY — The cost of providing insurance to state employees is expected to increase by $71 million in 2014, and officials will have to decide before then if the state or the workers — or both — will pick up the increased tab.

“Either the state funds it, or it will be shouldered by the employees, or we make some changes to networks,” said William Ashmore, chief executive officer of the Alabama State Employees Insurance Board.

The insurance board is the plan administrator for about 120,000 current and retired state and local government employees and their dependents.

A spokeswoman for Gov. Robert Bentley’s office said insurance board funding is one of many issues being worked on between now and the start of the 2013 legislative session in February.

Because state employees haven’t had raises since 2008, paying more for their health insurance would mean a decrease in take-home pay, said state Sen. Arthur Orr, R-Decatur, who chairs the Senate general fund committee.

“We are certainly going to do all we can to mitigate the impact on employees, but the (general fund) budget does not have a lot of flexibility these days,” he said.

Of the $71 million in expected increases, about $17 million are being attributed to expanded coverage mandated by the federal Affordable Care Act, Ashmore said.

Employees will have more benefits under the Affordable Care Act, but Orr said there needs to be discussions about whether the state pays for that coverage.

“We’ll be having conversations with (Bentley’s) people in the month of December to see if we can come to some sort of consensus on the issue,” Orr said.

No matter where the increases come from, Senate Minority Leader Roger Bedford, D-Russellville, said they shouldn’t be passed on to employees and that the state should “step up.”

“I do not think that the employees should have to pay anymore,” he said. He said he will advocate as much in the next legislative session.

The amount of taxpayer money funneled to the insurance board through the general fund has decreased in recent years because it’s based on the number of state employees, which has declined, Ashmore said.

In 2007, about $320 million came from the general fund; this year, that number will be more like $298 million, he said.

But because the system includes retirees and dependents, the number of people receiving insurance hasn’t really changed.

“What we get for active employees also pays for retirees,” Ashmore said.

Currently, Alabama and its employees spend less for health insurance than other states in the Southeast, Ashmore said.

The state spends $343 per month for a single employee, Ashmore said. The national average is $370. Meanwhile, that single state employee contributes $15 a month, if he or she is a non-smoker and participants in the state’s wellness program. An employee with a family of dependents spends $205 a month.

Mac McArthur, executive director of the Alabama State Employees Association, said the federal government should pay for increases associated with the Affordable Care Act.

Ashmore said that removing patient co-pays for preventive care such as mammograms and colonoscopies, an Affordable Care mandate, will mean a $7 million increase. The act also does away with annual or lifetime limits, which will increase costs by about $5 million.

Contraceptive coverage will be “a couple million,” Ashmore said.

State employees already can carry their children on their insurance up to age 26. “It’s a great benefit, but it costs about $3 million a year,” Ashmore said.

But if all the expected cost increases were passed to employees, it would be devastating, especially to the lower-paid ones who may only make $22,000 to $25,000 a year, McArthur said. He said he’s been told that premiums could increase each month by about $110 for a single employee and $105 for a family.

“They simply can’t afford it and you’ll see people declining coverage,” McArthur said.

Ashmore said changes to provider networks or coverage in another option are possible solutions. Removing the state contribution for dental coverage is a possible solution as well. Orr said that would save the state about $20 million a year.

“That is one of the first things I’d like to look at,” Orr said.

The state’s education employee health insurance program does not pay for dental coverage, Orr said.

The educators’ insurance plan isn’t facing as drastic increases in 2013 because it has made changes, including premium and co-pay increases, in recent years, Orr said.

Mary Sell can be reached at mary.sell@TimesDaily.com.

By the numbers

The number of state workers in northwest Alabama:

Colbert: 468

Franklin: 104

Lauderdale: 289

Lawrence: 145