The big news: The Idaho School Benefit Trust (ISBT), a self-funded health insurance pool that is widely used by districts, charters, and the staff of the Idaho Education Association, is collapsing — and the consequences are reverberating.
• The fund now has a $13 million shortfall, but that’s an estimate. The Idaho Department of Insurance has not released the full figure.
• ISBT announced the shortfall to members on July 14, just two weeks after the July 1 deadline to renew membership and after many districts had already concluded negotiations and adopted their budgets for the fiscal year.
• The latest: Friday afternoon, the Idaho Department of Insurance has asked to take over the trust and insert the department's director, Dean Cameron, as ISBT's rehabilitator. Its petition was made in Fourth District Court. Cameron specifically mentioned the uncertainty created by the ongoing drama. "We want to assure Idaho educators and staff that the department is acting decisively to protect them," he said in a news release.
Take a Deep Dive with IdahoEdNews.org
Idaho Education News is the only media outlet that has been doggedly reporting on the ISBT crisis. Check out their excellent coverage for a timeline and detailed articles on how the crisis has unfolded, as well as breaking news.
How the trust works: ISBT is not traditional insurance.
• As a self-funded plan, members of the trust — districts — are responsible for claims and the financial risk that comes with them. ISBT has long been attractive to districts because of its lower rates.
• Blue Cross administers the plan, which is why the trust’s insurance cards are nearly indistinguishable from a typical Blue Cross card.
• The trust is overseen by a five-member board and employs a manager.
• ISBT’s reserves have dropped by over $20 million since 2021.
The scandal: As Idaho Education News has extensively reported, the letter sent to districts in July announcing the shortfall was the first members heard about the financial crisis.
• As Idaho Education News reported, Superintendent of Public Instruction Debbie Critchfield asked Dean Cameron, the director of the Idaho Department of Insurance, how the crisis came about. Cameron wrote: “Essentially, it appears the trust board with their actuary underestimated the amount of claims AND underfunded the trust.” Cameron also told Critchfield the trust has been “walking a tight line” for some time.
• Idaho Education News reported that a salesperson for ISBT did not understand the difference between a fully insured program and a self-funded program, which may have helped understate the risk for districts.
What it means for member districts: Member districts have seen their insurance rates go up, and fast.
• Trust members — school districts — are now on the hook in the form of lump-sum or monthly payments that are due starting in September.
• The trust’s plan will move to a fully insured Blue Cross plan in September, but it’s too little, too late for the member districts that are on the hook.
What it means for IEA members: Costs may be increasing for districts, but that doesn’t necessarily mean costs should, or will, be passed on to educators. “Contracts are ratified, which means districts need to use their fund balances to pay the increased healthcare costs,” said IEA Region 2 Director Jason McKinley, who serves as the union’s bargaining coordinator. “Districts cannot force a return to the negotiations table unless they can declare a financial emergency. If a district does not have a supplemental levy, or sufficient fund balance to cover the shortage, the ISBT shortfall may create a financial emergency for a school district."
• If you are a local president and your district has declared a financial emergency, please reach out to your region director for assistance navigating next steps.
