The state of North Dakota could be a step closer to adopting a “self insurance” plan for state employee health care coverage.
An amendment attached by the House to the budget bill for the Public Employees Retirement System says the PERS board must solicit bids for health insurance over the next two year period, and that “request for proposals” must include an option for self-insurance. The amendment says PERS cannot issue a contract until it receives input from the Legislature.
Rep. Mike Lefor (R-Dickinson) said self-insurance is a good option.
"What you're doing is picking a third-party administrator," Lefor said. "The state actually pays the claims, saving some middle-man fees."
Lefor said it has been proven that if you get your loss ratios and reserves in order, you can have a more effective health care program.
"Plus, it slows down the growth of premiums," Lefor said.
Lefor said if you look at statistics over the past few years, most companies with 750 or more employees go to self-insurance plans.
Several years ago, the state did try a self-insurance plan. It didn’t work, however. Lefor said that plan wasn’t set up correctly.
"Since that time, there's been a lot of changes in the health care system," Lefor said. "We are now more sophisticated in working with third-party administrators."
And Lefor said there are a number of employers in North Dakota that do this very thing. And he said they have testified to lawmakers that it has been successful.
"The key is to start in the right direction," Lefor said.
He said that means establishing a reasonable reserve, and to make sure there’s enough money available to pay claims.
The PERS budget is now in a conference committee.
