Teacher health insurance bill heads to Senate

Jan. 25—BOISE — Legislation that could boost take-home pay for public school employees while potentially reducing local property taxes passed the Idaho House on a 55-14 vote Monday.

House Bill 443 is the opening salvo in a multi-pronged effort this session to reduce health insurance costs for K-12 teachers and classified staff.

It sets up an account that, contingent upon state funding, would let school districts shift from their private health insurance plans onto the state's self-funded insurance pool.

Rep. Rod Furniss, R-Rigby, said the move could save employees hundreds of dollars a month on insurance premiums, since the state plan is so much cheaper.

"Most teachers right now have $1,000 to $3,000 deductibles, and most pay $600 to $1,500 per month," he said. "Some teachers and classified staff end up writing a check at the end of the month back to the school, to pay for health insurance. I think we can do better."

House Minority Leader Ilana Rubel, D-Boise, said she was thrilled to stand in support of the bill.

"This is what I came to this building to see happen," she said. "A very real problem is facing the people of Idaho, and a tremendous amount of work and research has gone into delivering a really sensible solution. This is government at its best."

Reps. Mike Kingsley, R-Lewiston, and Priscilla Giddings, R-White Bird, were the only north central Idaho lawmakers to oppose the legislation. It now heads to the Senate for further action.

Furniss noted that school districts currently get about $8,400 per employee in state funding for health insurance costs. That's nearly a third less than the $12,500 other state agencies receive.

Gov. Brad Little is proposing an ongoing $105 million increase in state funding, beginning in fiscal 2023, to boost schools up to that same level.

That by itself should help districts negotiate better insurance plans with private carriers, Furniss said. However, the governor also wants districts to have the option to shift to the state's insurance pool.

In order to do that, they need to come up with a "buy in" fee of about $2,300 per employee. The money would help beef up the state plan's reserve account, which is used to pay claims if the premium revenue is insufficient.

If every district in the state were to shift to the state pool, Furniss said, the buy-in fee would be about $75.5 million.

HB 443 doesn't appropriate any money, but it does set up an account to hold the $75.5 million, should the Legislature choose to appropriate it.

The bill also eliminates leadership premiums for school teachers, which would save nearly $20 million per year. School stakeholders support the move.

Rep. Wendy Horman, R-Idaho Falls, co-sponsored the legislation. She said it could reduce pressure on local property taxes, since school districts would no longer need supplemental levies to help cover insurance costs.

To the extent that it encourages veteran teachers to remain in Idaho, she said, it would also benefit students.

"So not only are we helping teachers with this, I believe we're helping students and property tax payers," she said.

Rep. Heather Scott, R-Blanchard, was one of the few House members to debate against the legislation.

"I like the policy in this bill," she said. "I like putting teachers under the state plan. Sometimes they forget that they're state employees and they work for the citizens."

However, Scott worried the bill might result in a "windfall" for Blue Cross, which currently administers the state insurance pool. She suggested voters might see this as a "payoff" in exchange for campaign donations.

"The incentive is to jump onto the state plan and give this windfall to Blue Cross," she said.

Furniss said the $75 million goes into the claims reserve fund, not to Blue Cross. The company simply administers the state plan. Other insurers will have the opportunity to compete for the business next year, when the administration contract goes out to bid.

He also noted that Blue Cross already sells health insurance to about 85% of the school districts in the state.

"We aren't changing market share, we aren't creating a big monopoly," Furniss said. "In fact, Blue Cross will probably lose money on this deal. They make more money on (the private plans) than they will in the state plan."

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