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Senate committee debates moving state employees off "grandfathered" health plan; members consider a voluntary third plan option
Summary
Senators and agency witnesses discussed Senate Bill 2160 and its potential fiscal and enrollment impacts if the state's employee health plan were made non-grandfathered; officials recommended more data and proposed a voluntary third-plan option as a phased approach.
Senate Human Services Committee members spent an extended portion of their Jan. 15 meeting discussing Senate Bill 2160, which would require the state employees' health plan (for pre-Medicare employees) to lose its "grandfathered" status and adopt coverage aligned with large-employer non-grandfathered plans.
Dylan Wheeler of Sanford Health Plan told the committee his data team was prioritizing a requested analysis but estimated it would take roughly 40 hours of work and would not be ready during that day's hearing. "You can have 2 out of 3, but not all 3," Wheeler said, referring to speed, cost and accuracy in preparing the data.
Rebecca Fricke, executive director of the Public Employees Retirement System (PERS), advised the committee that the bill as drafted would make the state plan non-grandfathered and require coverage "mandated for large employers," a change she said differs from the phrase "essential health benefits" (a technical term tied to individual and small-group markets). "I just wanted to clarify that because the essential health benefits would add additional costs that are beyond the scope of what this bill in the fiscal note for this bill covered," Fricke said.
Fricke and other witnesses told senators the state had maintained grandfathered status since the Affordable Care Act (ACA) was enacted in March 2010 and that a plan could remain grandfathered as long as changes to premiums and benefit design do not exceed specified thresholds tied to the ACA's grandfathering rules. Fricke cited two triggers that could force a move to non-grandfathered status: charging employees more than a specified premium differential since 2010 and changing plan design in a way that shifts costs to enrollees in an amount roughly equivalent to that differential.
Committee members and PERS staff discussed fiscal and implementation questions. PERS staff said the fiscal note for the bill (as presented to the committee) estimated an increase in premium of about 3.9% for the next biennium; senators also cited a broader fiscal-note estimate "north of $20,000,000." Committee members asked whether a phased approach would be possible. Several senators proposed creating an optional third plan so employees could choose a non-grandfathered option while preserving a grandfathered plan for the rest of the population.
Senators and staff discussed sample cost figures used in earlier work: a prior estimate of approximately $54–$59 per month for an optional non-grandfathered plan; the committee discussed the mechanics of offering a third option at an annual open-enrollment date to give employees time to compare plans. Speakers noted the state's political subdivisions (counties, cities, smaller employers) could face separate issues if the state moved to a non-grandfathered plan, because some small political subdivisions could not participate in the non-grandfathered offering.
Committee members directed staff and stakeholders to continue data work and to draft potential language for an optional third plan to present at a subsequent meeting. No formal committee vote on policy for SB 2160 was recorded in the transcript excerpt.
Ending: The committee asked for additional data and asked staff to prepare language for a potential optional third plan to be considered at a future meeting.
