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Opposition develops over plan to self-fund ND employee health insurance

Sen. Dick Dever, R-Bismarck, spoke in opposition to House Bill 1436 to the Senate Government and Veterans Affairs Committee on Monday. He asked for more time to solve the complicated Public Employees Retirement System. The bill would allow for North Dakota to switch to self-funding of the state employee insurance. Mike McCleary / Bismarck Tribune

BISMARCK—A bill that would allow for North Dakota to switch to self-funding of the state employee insurance plan drew pushback from lawmakers and others during its first Senate committee hearing Monday, with questions over the timing for such a major change late in the session.

House Majority Leader Al Carlson, R-Fargo, told the Senate Government and Veterans Affairs Committee that North Dakota, the last state to not self-fund its employee health insurance plan, would benefit from the move in the long run.

House Bill 1436 would give the Legislature more control over the purse strings of the state's insurance fund, Carlson said.

"I'm looking down the road," Carlson said. "The Legislature should be more involved."

In HB1436, insurance contributions would be pooled into a state-owned reserve fund. The state would contract with an insurance company to manage the plan.

The Employee Benefits Programs Committee would receive quarterly reports on the activities of the Public Employees Retirement System, and any contracts entered by the PERS board would be subject to legislative appropriation and changes.

Self-funded insurance would reduce costs, according to Carlson, adding that improved employee health would lead to fewer claims.

"This has to do with looking ahead," said Carlson, pointing out the state needs to rein in the growing costs of health care, which totals hundreds of millions of dollars per biennium.

Sen. Dick Dever, R-Bismarck, was critical of how the state can reasonably review and address such a complex issue through a delayed bill that was introduced last month.

"Today is Day 60 of what some hoped to be a 70-day session," said Dever, one of two lawmakers filling spots on the PERS board following changes to the board makeup during the 2015 session.

He said, if the Legislature is going to have control over contracts signed by the PERS board, then it should consider doing so for other appointed boards within state government.

"We need to have more consideration," Dever said of the HB1436 plan, which he urged the committee to reject.

Lisa Carlson, Sanford Health Plan's senior director of market strategy, said HB1436 would be an unconstitutional breach of the company's contract with PERS.

Carlson said the company has worked hard since signing the PERS contract a couple years ago to improve health care infrastructure in the state to ensure it meets its obligations.