Committee debates PERS health-plan rewrite; proposed $50 option fails, staff to draft legal language for state contribution

The Senate Human Services Committee debated Senate Bill 2160, a proposal to convert state employee health coverage from the current grandfathered plan to a non-grandfathered design (or to provide a third option), and rejected an amendment that would have created a $50-per-month third option plus a total rewards study. Committee members and PERS staff discussed implementation details, bidding practices and the statutory language that would be required to permit charging state employees a share of premiums.

Rebecca Fricke, executive director of the Public Employees Retirement System (PERS), told the committee that vendors already price both current (grandfathered) plan designs and non-grandfathered alternatives when the state goes out to bid, and that whatever the Legislature decides would become the plan design in the next bidding cycle (scheduled for 2026).

Fricke said, “When we go out to bid…we ask for the current plan design and what the cost would be for that. We also ask for if we were to move to non grandfathered for the state, what the costs…would be.” She added the state often requests multiple proposal types — fully insured, self-insured, pharmacy carve-outs — so the PERS board can weigh options at contract award.

Senators expressed differing views about speed and transition. Some members endorsed moving the whole state to non-grandfathered sooner to open more plan design and procurement options; others said a phased or optional approach would reduce disruption given recent pension changes and recruitment concerns. Committee members asked PERS to map an implementation “road map” including how a non-grandfathered status would interact with existing high-deductible health plan (HDHP) and health savings account (HSA) arrangements.

Separately, committee members discussed statutory language governing the state’s contribution to “fully paid family health insurance.” Rebecca Fricke recommended addressing those statutory sections in committee if the bill contemplates charging employees toward premiums, because separate state law currently describes the state contribution. Fricke and members cited two statutory references that had been reviewed previously: 54-52.106 and 54-52.107 (numbers cited in committee discussion) as loci where the state contribution appears in law and would need coordinated amendment if the committee wants to change premium payment obligations.

An amendment moved by Senator Hogan (amendment identifier read in committee as 020002) would have created a third option with a $50 monthly premium and directed a study of total compensation; Senator Hogan moved the amendment and Senator Weston seconded. The committee roll call on that amendment recorded multiple nays and the amendment failed (the clerk’s roll call recorded Senator Lee and Senator Hogan voting aye; Senators Weston, Arce, Van Osteen and Clemens recorded as nay, with the committee summarizing the result as failing). Committee members then discussed crafting an amendment that would explicitly change the state-law sections that set the state contribution; Fricke offered to help draft the statutory language and the committee scheduled time to consider a drafted amendment the next day.

Dylan Wheeler of Sanford Health Plan told the committee his organization was neutral on the bill as a policy matter but urged the committee to provide administrators specific direction on cost-sharing, network design and premium structures so vendors can build and price plan options for open enrollment. Wheeler said, “We’re neutral on this bill just at at the will of the policy makers policy decision…there’s additional details from an administrative point of view that we’ll need clarification on in order to build this plan and to get it ready for open enrollment.”

Committee members instructed staff to produce a draft amendment that clarifies how the state contribution would be calculated or altered if employees were asked to pay part of a premium. Rebecca Fricke agreed to help prepare the language and committee members planned to reconvene the next day at 10:00 a.m. to consider the draft amendment. No final committee vote on the underlying bill as introduced was recorded in the provided transcript.