Solvency of the State Employees' Health Insurance Trust Fund

The financial solvency of the State Employees' Health Insurance Trust Fund is vital for ensuring the availability of affordable health coverage for Florida's state employees. This report from Florida TaxWatch examines the Trust Fund’s financial outlook for fiscal years 2024 through 2029, highlighting the rising costs of health insurance and potential policy solutions to maintain the fund’s solvency.

The analysis shows that despite an initial estimated cash balance of $652.7 million for FY 2024-25, increasing expenses will result in projected operating losses over the next five years. Without changes to the current funding model or additional legislative appropriations, the Trust Fund risks running a deficit of over $1.5 billion by FY 2028-29.

Key factors include a rising number of enrollees due to legislative actions and consistent increases in healthcare costs. The report notes that Florida has historically maintained solvency through legislative appropriations but emphasizes that this approach may not be sustainable, especially with anticipated budget deficits in coming years.

Florida TaxWatch recommends aligning employee premium contributions more closely with those of other large employers, which could save the state approximately $446 million annually. The report also suggests revising contribution rates based on actuarial benefit differences between existing health plans to promote financial equity and sustainability.

As Florida anticipates significant budget challenges, proactive measures to address the Trust Fund’s solvency are crucial for long-term fiscal health and the well-being of state employees.

Download the full report here