State projects $203M health-plan revenue and modest reserves after FY26 plan design and premium changes

Commissioner Darren Seely and Sarah Delaney of Marsh McLennan Agency presented the state employee health-plan outlook to the Joint Committee on Appropriations on Jan. 30, outlining plan-design changes, premium adjustments and vendor negotiations intended to contain health-care cost growth.

Seely described South Dakota’s health plan as self-insured and said the program currently covers “a little over 12,000 employees” and “nearly 26,000 lives.” He told lawmakers the state built about $20 million in reserves since moving to a third-party administrator arrangement and that the FY26 proposal aims to keep the plan solvent without a surprise appropriation.

What changed and why: The administration recommended modest plan-design changes to the two lower-deductible plans (Jefferson and Roosevelt), small premium increases for most members and tighter copay/co-insurance on certain services. The changes are targeted to shift part of projected FY26 cost growth to plan members while preserving employer contribution; the…