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PEBA outlines three funding options for state health plan; base requirement $77.44M, employer request includes $4M authorization increase
Summary
Peggy Boykin of the Public Employee Benefit Authority presented plan membership data and three funding options for the state health plan. PEBA proposed increasing its authorization for employer contributions by $4 million and outlined impacts on employees, agencies and school districts.
Peggy Boykin, director of the Public Employee Benefit Authority (PEBA), told the Constitutional Subcommittee that the state health plan covers roughly 10% of South Carolina’s population and 543,579 lives in total. She presented three budget options for legislators to consider for the 2026 plan year and asked the committee to authorize a $4,000,000 increase in PEBA’s authorization to cover higher employer contributions.
Boykin said the plan covers about 307,000 subscribers: roughly 210,000 active employees, about 94,000 retirees and 3,000 others (COBRA and survivors). She said the plan includes more than 90,000 spouses and more than 145,000 children. On funding, Boykin described the plan’s base annualization as $75,862,000 plus $1,579,000 attributed to net retiree growth, for a total base requirement of $77,440,000.
PEBA projected a 3.9% increase in claims expense for the 2026 plan year. Boykin presented three options:
- Split the 3.9% evenly between employees and employers, which would add $29,166,000 to the base and result in an appropriations-line requirement of $106,607,000; employees would see an average increase of about $5.92 per month. - Employers pick up the entire 3.9%, increasing the state cost by $34,794,000 for a line requirement of $112,234,000; employees would see no increase. - Place the full increase on employees; PEBA calculated that would be about $36.76 per month per enrollee and would allow the plan to remain grandfathered under federal rules.
Boykin also provided an internal allocation of the employer-pays option across participant groups: roughly $23,000,000 tied to state agencies, almost $47,000,000 tied to school districts and roughly $41,000,000 tied to retirees. She noted statutory differences in how school districts are funded and said PEBA does not set those statutory funding rules.
On operating costs, Boykin said PEBA’s internal employer contribution costs have increased by about $4,000,000 over the last decade as employer retirement and health contributions rose; she asked the committee to increase PEBA’s authorization by that amount. The governor’s budget reportedly included that authorization increase, she said.
Committee members asked whether claims experience could be used to price participation by agency; Boykin said local governments are experience-rated today but that experience-rating state agencies, colleges and schools would likely require statutory or policy changes.
No formal committee vote took place during the hearing; the presentation provided data for budget deliberations.
