Committee hears bill to make Montana reinsurance statutory appropriation, members ask questions about fund volatility

Representative Ken Walsh opened House Bill 281 as a proposal from the state auditor’s office to change the Montana Reinsurance Program’s funding mechanism to a statutory appropriation so the auditor can request additional spending authority via the budget change document process when federal grant awards and state assessments fluctuate.

Walsh said the reinsurance program — established under a federal waiver and Montana statute after 2019 — has helped lower individual market premiums roughly 9–10 percent and that volatility in funding caused a shortfall in fiscal year 2024 that required a fiscal transfer and a supplemental request in HB3. Amber Thorvaldson, chief financial officer for the state auditor’s office, testified as a proponent and explained that the program receives a 1.2% assessment on carrier premiums (a state assessment that varies with premium levels) and an annual federal grant amount; both sources can fluctuate from year to year.

Committee members pressed the auditor’s office about the fiscal note chart and whether the 1.2% assessment is a reliable revenue source. Thorvaldson said the assessment is set in statute but the amount collected can vary and is difficult to estimate precisely; actuarial work and a reinsurance board set annual reimbursement levels based on available federal and state funds.

Legislative staff walked the committee through statutory-appropriation guidelines under 17-1-1508 (discussed in committee) and cautioned that “yes/no” boxes on fiscal notes reflect different guidance (in this case, a “no” can indicate appropriateness for statutory appropriation). Senators discussed predictability, carryover federal funds, and how statutory appropriation could affect budgeting. The chair later noted the committee would hold HB281 for a short time so Senator McGillivray could ask additional questions; the transcript records that the bill was held for follow-up.