Senate committee advances bill updating Idaho Life and Health Insurance Guarantee Association

Representative Jeff Ehlers of Meridian introduced House Bill 38 to the Senate Commerce Committee, saying the measure would update the Idaho Life and Health Insurance Guarantee Association to reflect national standards and close gaps that can leave Idaho policyholders exposed.

The bill would do four things, Ehlers said: exclude certain investors who buy life policies from coverage under the guarantee association; allow the association to roll back artificially high rates to standard market rates; permit Affordable Care Act–era co-ops doing business in Idaho to join the association; and remove a $300 statutory cap on membership fees paid by insurer members to cover the association’s administrative costs.

"The first one is to protect individual policy holders," Ehlers said. He compared the association to the FDIC for bank accounts and told the committee the change would stop factoring companies that purchase policies at discounts from being made whole by the association if an insurer fails. He also said the association should not be on the hook for policies sold at above‑market rates and should be allowed to revert to market rates if needed.

Bruce Spencer, who identified himself as representing Mountain Health Co-op, told the committee the co-op insures Idaho residents and supports joining the guarantee association. "We cover over 11,000 Idahoans with health insurance. We are happy to join the guarantee association and provide greater security and benefits for those insurers," Spencer said.

Committee members moved and seconded a voice vote to send H.B. 38 to the Senate floor with a due-pass recommendation. Senator Lakey made the motion and Senator Ward Engelking seconded; the committee recorded the voice vote and the motion carried.

Supporters said the fee-cap change would let the association adjust administrative levies without returning to the Legislature because the fees are charged to insurer members, not taxpayers. Ehlers said allowing co-ops to join would extend protections to entities doing business in Idaho that were originally excluded as higher risk but which sponsors now consider appropriate to protect Idaho consumers.

No amendments or alternatives were adopted in committee. The committee took the action by voice vote; no roll-call tally was recorded in the hearing transcript.