Senate passes amendments and gives Senate Bill 376 a favorable committee recommendation to reform state health benefits

The Senate Finance Committee adopted amendments and recommended Senate Bill 376, a bill to restructure the State Health Benefits Plan, sending it to the floor with a favorable committee report.

Lede: Senate Bill 376 would change how the state budgets and pays for the State Health Benefits Plan, replace the existing tiered employee contribution schedule with an 80/20 employer‑employee split for eligible employees, create a health care affordability fund to subsidize premiums for lower‑income workers and establish protections related to hospital prices and National Guard premium assistance.

Nut graf: Sponsors and the Health Care Authority said the bill is intended to reduce costs for many employees, eliminate the plan’s projected shortfall and extend affordable options to some National Guard members. Committee members adopted one amendment addressing actuarial reporting and another added this morning that would affect legislators’ participation; staff said the latter requires additional fiscal analysis.

What the bill does

- Actuarial rules and reporting: An adopted amendment requires actuarially sound budget requests and annual actuarial projections.

- Contribution structure: The bill replaces the existing salary‑based tiering (employees paying 20%, 30% or 40% depending on brackets) with a uniform 80/20 employer‑employee split for all eligible employees; the Health Care Authority said this brings the state closer to peer governments and private employers.

- Affordability fund and targeted subsidies: The bill creates a health care affordability fund to subsidize premiums for lower‑income employees and explicitly authorizes premium support to help eligible National Guard members access TRICARE Select Reserve coverage.

Testimony and fiscal questions

Senator Stefanik, the bill sponsor, told the committee: "The changes in this bill reduce employee costs by more than 40% on average, eliminate the state health benefits budget shortfall, decrease the uninsured rate among members of the National Guard, give public local public bodies more certainty around their costs, and save the state general fund $155,000,000 over the next 5 years."

Alex Castillo Smith, deputy secretary at the Health Care Authority, and Colin Bayo, Coverage Innovations director at HCA, described the bill’s five core elements and said it will require actuarially sound budgeting going forward. HCA staff noted they have not yet completed fiscal modeling of the amendment adopted this morning that would extend employer contribution benefits for legislators; the agency said that amendment will increase the fiscal impact and requires further analysis.

Major General Miguel Aguilar, Adjutant General for the New Mexico National Guard, testified the bill could extend coverage to guardsmen currently uninsured, saying several Guardsmen lack insurance and that a modest premium support could enable TRICARE options for many service members.

Supporters from unions and education groups — including AFSCME, NEA New Mexico and CWA Local 7076 — urged passage, citing reduced out‑of‑pocket costs and relief for employees who have seen paychecks shrink when salary increases pushed them into higher insurance tiers.

Committee action and votes

- Amendment on actuarial reporting: The committee adopted an amendment for actuarial soundness and annual actuarial projections by unanimous consent (roll call recorded). The roll call as read recorded the following: Senator Brandt (yes), Senator Campos (yes), Senator Gonzales (yes), Senator Lanier (yes), Senator Padilla (yes), Senator Steinborn (yes), Senator Tobias (yes), Senator Trujillo (yes), Senator Woods (no), Senator Shandoh (yes), Senator Munoz (yes). The amendment was adopted.

- Motion for "do pass": Senator Padilla moved a "do pass" recommendation; Senator Tobias seconded. The committee recorded a "do pass" recommendation with a tally read on the record: 8 in the affirmative, 0 in the negative.

Why senators asked for more analysis: Committee members asked HCA to supply more detailed fiscal estimates that account for the amendment adopted this morning (affecting legislators’ contributions) and to clarify the funding source for the affordability subsidies. HCA said the larger portion of the original bill’s cost could be supported by the Health Care Affordability Fund as a nonrecurring source and that the reform would reduce the general fund shortfall from the $87 million projected in HB2 to about $68 million, a net general fund savings relative to the current baseline if the bill and identified offsets are enacted.

Quotes

"As the largest payer of health care in New Mexico, the Health Care Authority has a responsibility to the market," Alex Castillo Smith said, urging that the HCA be given authority to pursue actuarial reforms and purchasing strategies.

"This $50 would allow every soldier, who does not have health care to have the opportunity to have health care," Major General Miguel Aguilar said of the TRICARE Select Reserve premium gap for some guardsmen.

Ending

The committee sent Senate Bill 376 to the floor with a favorable recommendation and asked the Health Care Authority and fiscal staff to provide updated cost estimates reflecting the newly adopted amendment and to clarify whether the Health Care Affordability Fund, general fund or a combination will cover the program ramps and ongoing costs. The bill will next appear on the Senate floor for further debate and final votes.