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Officials describe stop‑loss procurement and self‑insurance cash for government health program
Summary
Budget officials told senators that stop‑loss (reinsurance) for the government’s self‑funded health plan was procured via a third‑party administrator and that the government used cash to establish a self‑insurance fund; officials described the procurement as competitive through the TPA.
Officials told the finance committee that stop‑loss (reinsurance) coverage for the government’s self‑funded health insurance program was procured by the third‑party administrator (TPA) after inviting bids, and that the government has used internal cash to establish a self‑insurance reserve.
"The stop loss insurance was procured by our TPA, who, I think invited 3 bids and having discussed it with us, determined we determined which was the lowest, the lowest qualifying bid," said Mister Byrne. Byrne added that because the government is not an insurer it cannot itself be the primary insurer on the stop‑loss product and that the TPA route was used while officials work toward a procurement approach the government can execute directly.
Senators asked whether the procurement process ensured transparency and competitive evaluation; Byrne said the TPA conducted a competitive solicitation and officials considered the lowest qualifying offer. On the question of a government‑held reserve, senators and the administration referenced a previously reported $33 million cash set‑aside tied to a self‑insurance program that appeared in the 2023 audit. Officials said the audited financial statements show amounts in various fund categories (restricted, committed, unassigned) and that the $33 million described in the audit reflected cash used to establish a reserve, not necessarily a new appropriation.
Officials also said the FY26 budget reflects a slight projected reduction, about 1.2 percent, in the government’s share of health insurance costs compared with the prior projection. They cautioned that health insurance funding is comprised of multiple components — salary‑related on‑costs, retiree contributions and other appropriations — and that year‑end balances are reported in the financial statements.
No policy change or procurement award beyond these descriptions was adopted at the hearing.
