Analysts tell JFAC health insurance and PERSI are largest drivers of benefits spending; governor proposes higher per‑employee health appropriation

At the Joint Finance‑Appropriations Committee meeting, Frances Lippitt, budget and policy analyst at the Legislative Services Office, provided an overview of the state's employee benefits package and how benefit costs are built into agency budgets.

Lippitt said benefits generally account for about a quarter of state personnel expenditures, with health insurance representing nearly half of benefits costs. She told the committee the state budgets health insurance on a per‑full‑time‑position (FTP) appropriation and that the actuarial recommendation used for the governor's FY2026 proposal would set the per‑FTP health appropriation at $14,300. That change reflects an actuarial recommendation intended to cover plan costs in 90% of modeled years; using that figure would increase the health appropriation by an estimated $56.6 million.

Lippitt summarized how variable benefits are budgeted as a percentage of salary. Employer contributions to the Public Employee Retirement System of Idaho (PERSI) were listed at 11.96% for general members, 14.65% for public safety employees and 13.47% for teachers. She told the committee combining variable benefits and health insurance can produce widely different total personnel costs by salary level: lower paid workers require a larger percentage of total budgeted compensation to cover benefits compared with higher paid employees.

She described the role of the Joint Change in Employee Compensation (CEC) process: the CEC committee evaluates Division of Human Resources recommendations and presents compensation and benefits suggestions to JFAC. "The annual change in employee compensation process centers around the four main components of Idaho's total compensation system," she said, referencing statutory guidance for the process.

Why it matters: benefit costs are a persistent, ongoing portion of agency budgets. Funding decisions for health premiums, employer PERSI rates, or broad employee compensation changes directly affect agency program maintenance costs and the amount of general fund needed in future years.

Follow‑up and context: Lippitt noted the appropriation target chosen by the governor is more conservative (less reliant on drawing down reserves) than the actuarial minimum required to maintain the plan; the committee will consider CEC recommendations and agency testimony as it sets the FY2026 program maintenance budget. No formal votes were taken during this presentation.