Public Employees' Benefits Program reduces reserves to cover $33.5M in claims; board keeps 2026 rates flat
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Summary
The Public Employees' Benefits Program told the committee it will increase medical-claims authority by $33.5 million using reserves and offsets; PEBP staff said board action preserves flat 2026 rates while protecting a small reserve for 2027 risk.
Celestina Glover, speaking for the Public Employees' Benefits Program, told the Interim Finance Committee that PEBP sought an increase of $33.5 million in medical-claims budget authority to cover higher-than-expected claims. The work program reduces reserves by about $15.3 million, draws savings from another expenditure category and offsets some of the change with projected revenues.
Why it matters: PEBP officials said their prior reserves have declined and that if the program continues to draw on reserves, there is a risk of higher premiums or reduced benefits in future plan years. PEBP's board approved rate decisions on March 20 that keep employer contribution subsidy levels flat for the 2026 plan year; staff said that decision was intended to preserve a small reserve for 2027.
Committee action: The committee approved the work-program revision (agenda item E97) on a motion by Assemblymember Daniel Monroe Moreno and a second from Senator Kate Wynne.
Quote: "That reduction in reserves could be offset with additional revenues or savings in expenditures... but where that ends up, we don't know," Celestina Glover said, urging the committee to consider long-term rate and reserve implications.
Ending: PEBP staff told the committee they will continue monitoring claims experience and will report back if further changes are needed ahead of the 2027 plan year.
