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JFAC briefing: state benefits account for roughly a quarter of personnel costs; governor recommends higher per-FTP health appropriation
Summary
Legislative analysts told the Joint Finance-Appropriations Committee that benefits comprise about 26.6% of personnel expenditures and described the governor—s recommendation to raise the health-insurance appropriated amount per full-time position to reduce reliance on reserves.
Frances Lippitt, a budget and policy analyst with the Legislative Services Office, told the Joint Finance-Appropriations Committee that the state—s employee benefits package makes up about a quarter of personnel costs and that health insurance is the single largest component.
Lippitt said benefits accounted for 26.6% of personnel cost expenditures in FY2024 and that health insurance represents nearly half of benefits spending. "Combining those, the state currently budgets 23% of an employee's salary for variable benefits," she said, summarizing how variable benefits (PERSI, Social Security, Medicare, life insurance and other items) are calculated as a share of payroll.
Governor—s recommendation and reserves: Lippitt explained how the health-care appropriation is built around a per-FTP (full-time position) appropriation that includes premiums, an enrollment "sweep" for employees who decline coverage, and a reserve target. Using actuarial guidance and a minimum-reserve approach (the plan carries a contractual minimum reserve equal to 10% of expected premiums), legislative staff said the board—s actuarial recommendation would fund $13,960 per FTP for FY2026. The governor—s recommended appropriation is $14,300 per FTP, which Lippitt said reflects an actuarial choice intended to cover plan costs in about 90% of modeled outcomes and reduces reliance on drawing plan reserves; the differential totals roughly $56.6 million statewide.
PERSI and other rates: Lippitt reviewed employer contribution rates for the Public Employee Retirement System of Idaho (PERSI), reporting current employer rates of 11.96% for general members, 14.65% for public safety employees and 13.47% for teachers. She said employer contributions totaled about $141.5 million in FY2024.
Why it matters: Changes to the health-insurance appropriation and retirement contribution rates affect agencies across government and are a material driver of the personnel portion of the state budget. The Change in Employee Compensation (CEC) committee will vet salary structure, benefit proposals and recommended pay changes and forward recommendations to JFAC.
Questions and context: Committee members asked why the governor might recommend a more conservative per-FTP appropriation instead of drawing plan reserves; staff said the larger appropriation reduces volatility and provides greater stability in future budgeting. Lippitt said she was available to answer detailed follow-ups and that the CEC process will return recommendations to JFAC for final appropriation decisions.
Ending: The committee did not take action; staff will provide details during upcoming agency hearings and the CEC—s recommendations.
