Bill introduced to cope with rising costs of UI employee health benefits
BOISE — An Idaho Senate committee voted unanimously Thursday to introduce a bill to curb a $6 million increase in a support account tied to University of Idaho employee health benefits.
The balance for the university’s reserve and surplus account has been determined using the same equation since UI began self-funding the medical, vision, dental and pharmaceutical benefits offered to its faculty and staff in 2008.
According to UI Legislative Liaison Joseph Stegner, who brought the proposal to the legislature, a bill passed in 2013 will change the calculations used to determine the amount going into the reserve and surplus account, and the change will mean a sharp increase in costs to the university.
Goerge Wood Jr. | Argonaut
UI Legislative Liaison Joseph Stegner proposes legislation Thursday that would curb a $6 million increase in a support account tied to UI employee health benefits.
“On July 1st of this year, because of the 2013 bill, the University of Idaho is faced with having to increase our reserve surplus balance to over $9 million, an increase of over $6 million,” Stegner said. “That’s money we have to find elsewhere in the system to sink into an account that we can’t use for any other purpose, unless we terminate the plan.”
Sen. Roy Lacey, D-Pocatello, moved to unanimously give the proposal a hearing within the committee.
The original model, Stegner said, calculated the balance of the reserve and surplus account by recording the number of incurred claims that had not been paid out by the university. This model would be replaced by another method of calculation July 1, if the 2013 bill goes into effect without adjustment.
If Stegner’s proposal passes and the original reserve and surplus calculation are reinstated, Stegner said the account is estimated to retain about $3 million of university funds.
“Over the past several months, we’ve had discussions with the Department of Insurance … They have expressed to me that they do not plan to oppose this bill,” Stegner said. “Likewise, we have had discussions with key legislators and modified our request here based on their input and we are unaware, at the moment, of anyone opposed to this option.”
He said multiple options are available should the proposal get shut down, such as drafting other proposals to present before the legislature or UI switching its employees over to a state health insurance plan.
Stegner’s proposal was approved by the State Board of Education Wednesday. Stegner and UI General Counsel Kent Nelson, Director of Budget Keith Ickes and Vice President Ron Smith drafted the proposal.
In accordance to state law, university self-funding employee health benefits are required to maintain a reserve and surplus fund that pays any residual claims if a university decides to terminate its self-funded health plan in favor of a more traditional health insurance plan.
Stegner said UI is the only public post-secondary institution in Idaho that chooses to self-fund employee health benefits. He said this was because self-funding proved to be more cost effective for UI than insuring through the state, which is the route Boise State University, Idaho State University and Lewis-Clark State College took.
George Wood Jr. can be reached at [email protected]