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Committee deadlocked on FY2026 health insurance rate; motions fail, debate highlights reserve-risk tradeoffs
Summary
Two competing proposals for the FY2026 health insurance base rate failed to achieve the required majorities in both chambers. Debate focused on projected reserve balances, contract minimums, and the trade-off between lower premiums this year and potential higher increases next year.
The Joint Finance and Appropriations Committee did not adopt a change to the state employee health insurance base for fiscal year 2026 after competing motions failed to win a majority in both chambers.
Two approaches were presented: the governor's recommendation to set the base health insurance amount for a full-time eligible position at $14,300 (an increase of $1,300) and the Economic Outlook/CEC committee recommendation to set the base at $13,960 (an increase of $960). Analysts told the committee the difference would affect reserve balances and the contractual contingency the state must maintain.
Division of Financial Management staff explained actuarial projections from Milliman showing that adopting the CEC recommendation ($13,960) would reduce the insurance reserve balance to approximately the statutory minimum of 10% ($51,600,000 by projection). The governor's…
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