Senate approves high-deductible health plan option for public employees amid warnings about cost shifting

The Utah Senate on Feb. 28 approved House Bill 76, authorizing the Public Employees Health Program (PEHP) to offer a high-deductible health-plan option and associated health savings accounts (HSAs).

Sponsor Senator Jenkins said the option would give state employees another tool to control health costs and praised letters of support from local officials and health-care executives. Supporters, including Senator Stevenson, argued HSAs empower consumers to shop and reduce wasteful spending. Opponents, notably Senator Davis, warned that offering HSAs could raise overall state costs if low-risk employees migrate to HSAs and leave higher-risk employees in traditional plans, resulting in higher premiums for those with costly medical conditions.

Senator Evans and others stressed that the bill includes language to make funding for HSAs actuarially neutral for PEHP — meaning the program can adjust funding so the state’s costs remain revenue-neutral. The sponsor and proponents pointed to the bill’s actuarial-neutral language and defended HSAs as an additional option rather than a replacement for existing coverage.

President Valentine gave an explanation of his vote, saying he was “nervous” about potential cost shifting but supported moving forward while urging PEHP to implement the option carefully so employees are not harmed. The final roll call recorded 19 yes, 9 no and 1 absent; the bill will be signed in open session and returned to the House for enrollment.

Implications: The change expands the menu of coverage options for public employees. The bill’s fiscal or actuarial consequences will depend on how PEHP sets funding and eligibility details during implementation.