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PERS outlines state health plan history, member programs and RFP timeline ahead of 2027 contract
Summary
PERS officials told the Employee Benefits Committee the state has paid family health insurance since 1979, reviewed member wellness programs and said an RFP for the 2027–29 biennium will be released June 1, 2026; officials warned legislative coverage changes raise future premiums and noted recent mandate costs were covered from reserves.
Derek Holbein, chief operating and financial officer for the Public Employees Retirement System, told the Employee Benefits Committee that the Uniform Group Insurance Program dates to the 1960s and that, "since 1979 through today, the state actually has paid the entire family paid health insurance on behalf of state employees." He walked members through decades of plan changes and said PERS has used tools such as formularies, network steering and higher deductibles to control costs.
Holbein described member-facing programs that PERS uses to lower long-term costs and encourage healthy behavior: a diabetes management program with copayment reimbursement, a high‑risk prevention program, a healthy‑pregnancy program that can save participants up to $850, gym access for Medicare retirees through a Silver & Fit arrangement and a wellness incentive worth up to $250 per person per year. "If you earn enough points throughout the year to promote educational opportunities to your employees ... you can earn a 1% discount on the premium that we are charging employers," he said.
On contracting, Holbein said the PERS Board typically bids the product every six years even though statute allows two‑year contracts. The board awarded the 2023 biennium contract to Sanford Health Plan and renewed for the 2025 biennium; PERS distributed an RFP to the board and plans to release it to the market on June 1, 2026, with bids due in July and an anticipated award before the end of the year so a new carrier could be in place for a July 1, 2027 implementation if everything proceeds on schedule.
Committee members pressed PERS on the fiscal effects of recent mandate-level changes. Holbein said several benefit additions in recent sessions were "not funded," and PERS used health‑insurance reserves to cover the initial impact. He cautioned that once a coverage addition is part of the plan it gets priced into future bids and thus can increase future premiums. When asked about House Bill 1216 (prescription copays counting toward out‑of‑pocket maximums), Holbein said that change, effective Jan. 1, 2025, raised premium costs and that the committee should expect actuarial detail on biennial apportioning.
Holbein offered to provide committee members the fiscal‑note specifics for past mandates and reiterated that additions to plan coverage are, in his view, typically policy decisions for the Legislature: "If it's not one of those two initiatives (a free carrier addition or a federal mandate), typically we default to the legislative assembly on what coverage you guys would like to offer within the plan." The committee did not take immediate action but discussed upcoming mandate bills later in the agenda.
