Committee advances bill to reset state health contributions, expand Guard coverage

The House Appropriations and Finance Committee voted to advance Senate Bill 376 on a committee vote after public testimony and member questions, moving the measure to the next stage with a recorded tally of 10 in favor and 4 opposed.

Senate Bill 376 requires the secretary of the Health Care Authority to submit actuarially sound budget requests for the state health benefits plan each year, replaces the plan's outdated salary contribution tiers with an 80/20 employer-employee split for eligible workers, creates programs that use the Health Care Affordability Fund to lower premiums for low‑income state employees, adds patient protections tied to fair hospital pricing initiatives, and creates premium-lowering options for New Mexico National Guard members who qualify for TRICARE Select Reserve.

The bill's sponsor and executive branch witnesses told the committee the changes are intended to stop recurring general‑fund backfills of the state health benefit budget and make coverage more affordable for employees. "The state health benefits plan has faced a deficit for many years, that’s been backfilled with general fund year over year," Carrie Armijo, cabinet secretary of the Health Care Authority, said. Armijo told the committee the bill would reduce employee costs "by more than 40% on average" compared with a straight actuarial reset, eliminate the state's health benefits budget shortfall and save the general fund an estimated $155 million over the next five years, including $20 million in fiscal year 2026.

Public testimony included labor and union representatives urging support and a National Guard official describing the need. "The New Mexico National Guard considers this bill critically important to our service members," Brig. Gen. Nathaniel Carper, Deputy Agent General for the New Mexico National Guard, told the committee. Carper said about 500 Guard members are currently uninsured and that coverage between orders and missions is needed for younger, junior enlisted soldiers who respond to disasters.

Union witnesses described recruitment and retention pressures for state agencies. "Removing the tiered system from the state employee insurance system will support our low and middle income state workers and their families," Lindsey Hurst, executive vice president of CWA Local 7076, said in testimony. Other union speakers said tiered brackets have sometimes caused employees to see take‑home pay fall when salary increases pushed them into a higher contribution bracket.

Committee members asked about funding sources and the Health Care Affordability Fund's current uses. Committee members were told roughly $10 million in recurring affordability‑fund assistance could help cover the net premiums for the lowest‑income state employees, and that the remaining change would be addressed in the state's compensation package. Witnesses also noted the affordability fund has been used to lower premiums for small businesses and marketplace enrollees, and that the fund's increased size this year allows an expansion of assistance while maintaining support for small businesses.

Opponents on the committee voiced concern over diverting affordability‑fund dollars and whether the general fund should shoulder some of the costs. Representative Duncan, speaking as a small business owner, objected to using funds that she said were intended to help small employers, while other members pressed for clarity on long‑term impacts for small businesses and on how local public bodies could participate in the pool.

The committee recorded the motion to pass the bill and proceeded to a roll call. For the record the motion to pass was made by Representative Sanchez and seconded by Representative Silva. The committee recorded 10 votes in the affirmative and 4 in the negative, and the measure advances to the next legislative stage.

The bill also adds language to allow local public bodies to purchase into the state plan pool; those local bodies would continue to set their own contribution tiers if they choose to join. The Health Care Authority told members that restoring an 80% employer contribution is intended to align New Mexico with many surrounding jurisdictions and to improve competitiveness for recruiting state employees.

Next steps: the bill will move forward in the legislative process to the House floor or the appropriate next committee action. Committee testimony and staff answers indicated that more detailed budget language will be reflected in House Bill 2 and the broader compensation package as the Legislature finalizes fiscal plans.

Speakers quoted in this article spoke during the agenda item on Senate Bill 376 at the House Appropriations and Finance Committee meeting.