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Committee moves bill to shift state employee plan out of ACA ‘grandfathered’ status; delays effective date and uses reserve fund
Summary
Appropriations Committee amended Senate Bill 2160 to delay full implementation until Jan. 1, 2027, approved partial funding from the health-insurance reserve and forwarded the bill to the floor; sponsors said the change will expand preventive benefits under the Affordable Care Act for state employees while allowing time for competitive bidding.
The Appropriations Committee approved an amendment to Senate Bill 2160 that changes the state employee health plan from a grandfathered status under the Affordable Care Act (ACA) to a non-grandfathered plan, delays the effective date to Jan. 1, 2027, and partially funds the initial cost from the health-insurance reserve fund.
Sponsor Senator Davison told the committee the change would allow the state to add preventive and maternal-child benefits — such as preventive colonoscopies, well-child visits, lactation counseling and coverage for breast pumps — and to align co-pay and out-of-pocket rules with non-grandfathered plans. “We need some tools in order to be able to … fight against that medical inflation,” Davison said, describing the motivation to move out of grandfathered status.
The committee amendment did two main things: it shifted the effective date from Jan. 1, 2026, to Jan. 1, 2027, to allow the state to run a competitive bid process for health-plan vendors, and it drew $4.3 million from the health-insurance reserve fund (out of a referenced reserve balance of roughly $55 million) to offset part of the first-year cost while the remainder comes from general and other funds for programs where employees are federally supported.
Levi, a budget staff member, explained the fiscal effect of the date change: moving the effective date to 2027 reduces the fiscal exposure in the coming biennium because the change would apply for only six months of that biennium — approximately one-third of the cost reflected in an earlier fiscal estimate. “If you adopt this, then an additional, or a new fiscal note will have to be requested on the bill to get the exact dollar amount,” Levi said.
Committee members pressed on whether employees would see new premium costs; Senator Davison and staff confirmed premium sharing proposals had been removed from the amendment and no new premium was imposed in the amendment under consideration. The committee approved the amendment and later approved the bill as amended; recorded committee votes were 15–0–1 on the amendment and 15–1 on final passage to the floor.
Key points: - Purpose: Move the PERS/State employee health plan off a grandfathered status under the ACA to allow broader preventive coverage and updated cost-sharing rules. - Effective date: amendment moves implementation to Jan. 1, 2027 (delayed from an earlier date in the policy proposal) to allow for competitive vendor bidding. - Funding: committee used a mix of health-insurance reserve funds (~$4.3 million drawn from a referenced reserve of about $55 million) and general/other funds to cover initial costs; an updated fiscal note will be required after bids and the amended effective date are finalized. - Employee premiums: staff and the sponsor confirmed that the amendment removed proposals that would have required new premiums from employees.
Senator Davison moved the amendment and the bill as amended; both were approved by committee and will proceed to the floor for further consideration.
