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LSO describes health insurance, PERSI and benefit budgeting; governor recommends higher per‑FTP health appropriation
Summary
Legislative staff reviewed the state benefits package, explained how health and variable benefits are budgeted, and noted the governor recommends raising the health appropriation per FTP to reduce reliance on reserve drawdowns.
Frances Lippitt, a budget and policy analyst with Legislative Services Office, briefed the committee on how benefits are budgeted across state agencies and explained components of the governor’s recommendation for health insurance and retirement contributions.
Lippitt said benefits represent roughly one-quarter of personnel costs in recent years. Health insurance is the largest component and is budgeted as an appropriation per full‑time position (FTP). The governor’s recommendation would set health insurance at $14,300 per FTP for FY2026, up from the actuarial minimum appropriation and intended to cover 100% of expected plan costs in 90% of scenarios; Lippitt said that change costs about $56.6 million in the governor’s recommendation.
PERSI (the Public Employee Retirement System of Idaho) employer contribution rates and other variable benefits (Social Security, Medicare, workers’ compensation) are treated as a percentage of salary; Lippitt noted the state currently budgets roughly 23% of salary for those variable benefits and cited the pension employer rate levels used in FY2024 figures.
Why it matters: health insurance and retirement contribution choices have structural effects on agency budgets. Lippitt explained the state maintains a reserve equal to 10% of expected premiums; the governor’s recommended per‑FTP appropriation is more conservative and relies less on drawing down reserves.
Committee questions: Senator Wintrow asked about the benefit of a higher appropriation versus drawing down reserves. Lippitt said the higher per‑FTP appropriation smooths employer costs and reduces reliance on reserves, providing more budget stability if claims rise.
