‘Game-changer’ insurance bill passes out of committee

BOISE — Legislation that would allow public school districts to shift from private health insurance carriers onto the state’s self-funded plan advanced to the House floor Wednesday.

Supporters described the bill as a “game-changer,” saying it will provide a substantial raise for teachers and support staff by slashing employee premium costs.

“I think this is a phenomenal piece of legislation,” said Rep. James Ruchti, D-Pocatello. “It provides a pay raise for teachers. It provides something teachers and other school staff really need, which is good health insurance. And it sends a message. … What they’re doing, what they’ve experienced the last couple of years (with the pandemic), everyone who works in the education system has been through the wringer. This is a perfect opportunity to say we appreciate what they’ve done.”

House Bill 443 is part of a broader proposal from Gov. Brad Little to provide an additional $105 million in state general funds to school districts, beginning next year, to help cover employee health insurance costs.

Schools currently receive $8,400 per employee for health insurance. Little wants to bump that to $12,500 — the same amount the state pays for other agency employees.

If approved by the Legislature, school districts could use the additional funding to get better deals from the private insurers they work with now.

However, the governor also wants them to have the option to switch to the state’s self-funded plan, which typically offers lower premiums than what school employees currently pay, as well as lower deductibles.

But shifting to the state plan comes with an additional cost. For every employee added to the plan, there’s about $2,300 “buy-in” fee. That money gets added to the plan’s reserve fund, which is used to cover certain high-cost claims.

If every school district decided to join the state pool, the total cost of the buy-in fee would be about $75.5 million.

HB 443 doesn’t appropriate that money, or the $105 million in state general funds. However, it does create a new account — essentially a funding “bucket” — to hold the buy-in fee, should the Legislature choose to appropriate it.

Rep. Rod Furniss, R-Rigby, co-sponsored the bill, together with Reps. Ryan Kerby, R-New Plymouth, and Wendy Horman, R-Idaho Falls.

Furniss told the House Judiciary and Rules Committee he doesn’t know how many districts will ultimately choose to join the state pool.

“We anticipate maybe a third or even half will come on in the first year,” he said.

However, given the $105 million in additional state funding, he also expected that private insurance carriers will “sharpen their pencils” and make competitive offers that will convince other districts to stick with their private plans.

Any money that’s left over from the $75.5 million would eventually return to the public schools savings account or the state general fund, Furniss said.

During an hour-long public hearing, several private carriers asked the committee to delay action on the bill, saying they wanted to work with the governor’s office and the co-sponsors on possible improvements.

Some committee members also wanted more time to understand the legislation and its implications.

Furniss didn’t see much value in a delay, saying he and others have been working on this issue for four years.

“I feel like we’ve reached a point where we need to make a decision,” he said.

The Idaho School Board Association, Idaho Association of School Administrators, Idaho Charter School Network and Idaho Education Association all testified in support of the bill.

“Idaho students, no matter where they reside, should have access to the best educators,” said IEA Executive Director Paul Stark. “This bill helps create the conditions needed to attract qualified teachers to all parts of Idaho.”

The committee recommended approval of the bill on a voice vote. It now goes to the House floor for a vote.

Spence may be contacted at bspence@lmtribune.com or (208) 791-9168.