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Senate Bill 1046

Senate Bill 1046

Phil Haunschild
February 15, 2017

Bill description: This bill requires that all state employees be given the option of choosing a high deductible health plan paired with Health Savings Accounts.

Rating: 0

Analyst’s note: The current state healthcare system offers employees several choices in their coverage. Employees may use a Preferred Provider Plan, a Traditional Plan, or a High Deductible Plan. This bill would require the state to offer a plan pairing the high deductible with a Health Savings Account (HSA). HSAs allow individuals or families to put funds into this account, tax-free, toward health expenses. The account helps cover the costs incurred with a high deductible. These plans have a lower premium cost than others which the state offers. The system is currently set up so that employees can opt out of their state health coverage and find their own insurance. If an employee does so, Idaho Code 67-5761 requires the state to deposit an amount equal to the monthly premium saved by the employer into the HSA of the employee.

Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth? 

Requiring these health plans be made available to public employees improves the overall benefits packages offered by the state. Establishing this system will cost $68,000, according to the bill’s Fiscal Note, affecting the general fund depending on how many employees transfer to this new system. The new system would require employers contribute at least $500 to each employee’s HSA, probably substantially more. The IRS maximum contribution - $3,400 for an individual and $6,750 for a family in 2017- is the only cap. (-1)

Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt? 

This bill has the potential to lower state spending on employee healthcare. Reasonably, this would give the government the ability to find the most effective program for each employee, using the employer’s portion of higher premiums to spend less. Lowering the premium for each plan when the state already pays the majority of premiums would more than offset the additional amount paid into employee HSAs.

Private employers are beginning to offer this plan, reducing expenses for some. The state does not have estimates of what the fiscal impact might be on taxpayers. (+1)

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