Idaho panel raises state employee health premium rate; companion pay proposals stall

The Joint Finance-Appropriations Committee on Jan. 31 approved an increase in state health insurance funding per eligible full‑time equivalent position for fiscal 2026, while several competing proposals to set change‑in‑employee‑compensation (CEC) levels failed to win the committee's approval.

The committee voted to set health insurance funding at $14,130 per eligible full‑time equivalent (FTP) for FY2026. Senator Woodward moved the $14,130 figure and Representative Tanner seconded the motion; the committee recorded a combined 17 ayes, 0 nays and 3 absent/excused, and the motion carried with a due‑pass recommendation.

The health insurance funding vote was the most definitive action of the morning; the committee spent several hours debating four alternative CEC packages — flat dollar increases, flat dollar with a guaranteed minimum percentage, merit‑based percentages and the governor's proposed 5% merit distribution — but none of those CEC motions passed before the committee recessed and agreed to revisit the issue.

Committee staff analyst Mr. Bybee walked members through the health insurance options on the packet and the projected reserve fund balances associated with each option. He told the committee that the projected FY2026 ending reserve balances would be about $51.6 million at the $13,960 level, $61.4 million at the $14,300 level, and an intermediate balance for the $14,130 midpoint (staff did not provide a precise midpoint calculation on the record).

Members framed the insurance debate around two questions: reflect the “actual cost” of employer benefits or use reserves to buy down premiums and smooth year‑to‑year impacts. Senator Ward Engelking argued the committee should “reflect the actual cost of insurance,” saying prior use of reserve funds to reduce the reported premium created the appearance of a large jump in cost this year. Representative Furness urged a lower funding level, citing historical reserve balances and Milliman actuarial projections she described as “conservative,” and said the $13,960 proposal overstated required funding.

Bybee also summarized the dollar impacts shown in the packet: the committee recorded staff‑quoted totals for the three health insurance choices. The $14,130 motion was presented with an increase that staff said would result in $36,043,900 from the general fund, $8,599,500 from dedicated funds and $3,753,800 from federal funds (total $48,397,200). The governor's $14,300 recommendation was stated as $42,076,600 general fund, $9,908,300 dedicated and $4,330,300 federal (total $56,315,200). The CEC committee's lower recommendation, $13,960, was presented as $29,996,000 general fund, $7,179,000 dedicated and $3,086,200 federal (total $40,261,200).

On CEC, staff presented four distinct motions in detail: (1) a dollar‑per‑hour approach (roughly $1.55/hour per employee) with agency flexibility; (2) the dollar amount plus a guaranteed 3% minimum up to higher salary thresholds; (3) a merit‑based up to 4% distribution; and (4) the governor's 5% merit proposal. Representative Miller formally moved the dollar‑per‑hour motion; Representative Mitchell seconded. Senator Cook moved a partly merit‑based alternative; Representative Furness later offered a substitute that combined the dollar approach with a guaranteed 3% minimum for many employees. Senator Wintrow later offered the governor's 5% motion.

Committee members repeatedly described tradeoffs between cost of living increases and merit‑based raises. Senator Cook and others argued merit incentives help retain top performers and avoid “participation‑trophy” outcomes, while Representative Handy and Senator Wintrow noted that a uniform cost‑of‑living increase could better meet employees’ immediate needs.

Procedural confusion also slowed the CEC votes. Members debated whether the joint committee voting rule required a majority of members present in each chamber or a majority of the committee membership; staff and the chair cited a 2023 letter setting a joint‑voting procedure and the committee applied a precedent requiring six votes from each body for passage that day. After multiple roll calls, the substitute and original CEC motions failed in successive votes and the committee recessed the CEC decisions to a future date.

The committee acknowledged the complexity of the CEC calculations — staff said the funding tables rely on multiple agency‑specific distributions and that ad‑hoc edits on the floor risk numeric errors — and asked staff to return with corrected language and calculations when members reconvene.

Committee staff said they will reschedule agency budget hearings that were affected by the extended CEC discussion. In the meantime, the adopted health insurance funding level will be included in the committee's FY2026 recommendations.

Votes at a glance

- Health insurance funding: Adopted $14,130 per eligible FTP for FY2026. Motion by Senator Woodward; second by Representative Tanner. Committee recorded 17 ayes, 0 nays, 3 absent/excused; motion carries with a due‑pass recommendation.

- CEC motions (multiple alternatives: dollar $1.55/hour approach; $1.55 + 3% floor; merit‑based up to 4%; governor's 5% merit distribution): No CEC motion carried. Motions were made by Representative Miller, Senator Cook, Representative Furness and Senator Wintrow at various points; multiple roll calls produced no majority for passage and the committee will revisit the CEC decisions.

What the committee will do next

Committee members asked staff to refine the numbered motions and associated language and to reissue a clear set of draft motions and calculated fund‑source impacts before reconvening. The committee adjourned until the next scheduled meeting and said it would reschedule displaced agency hearings.