BIRMINGHAM, Ala. – Alabama’s teacher health insurance program is heading into the 2026 legislative session with a shortfall of between $350 million and $410 million by 2027, depending on how fast health care costs rise.

Tuesday’s Public Education Employee Health Insurance Program board meeting centered on what the shortfall could mean once lawmakers return in January to hash out the fiscal year 2027 budget and the limited Education Trust Fund dollars available to cover it.

“Just to put it into context, we’re asking for an additional $380 million in funding,” Retirement Systems of Alabama legislative counsel Neah Scott told the board. “There’s $570 million available in new funds to be appropriated from the ETF.”

Of that new money, K-12 officials have asked for $350 million, higher educat

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