BOISE -- The state of Idaho has taken another step toward changing its state employee health insurance to a self-funded model, which could take effect as soon as next July.

Mercer, the New York-based human resources consulting company hired by the Legislature as an advisor on the question of insurance, recommended the move to the State Employee Group Insurance & Benefits Committee on Nov. 8.

“Based on the findings of this project, Mercer recommends for the sustainability of State of Idaho’s Employee Group Health Benefits Programs that the Interim Committee recommend moving forward with the self-funding of your medical plans,” wrote Mercer in its presentation to the committee.“Our recommendation is driven by the potential savings and the necessary flexibility needed for the implementation future plan/cost management strategies.”

The state of Idaho now uses a hybrid model of coverage for its workers. The plan is administered by Blue Cross of Idaho and it offers some self-funding features, but also includes protection for the state by paying for medical costs over 110 percent of the premiums that the state pays. Dave Jeppesen, executive vice president of consumer healthcare for Blue Cross, warned how easily a few incidents, such as a couple of babies in intensive care or a case of cancer, could spike medical costs, for which the state would then be liable.

But Sean White, a Mercer principal, pointed out that Idaho had never gone over the 110 percent level. Shelli Stayner, a principal in Mercer’s Boise office, noted that even under a hybrid plan, having many claims in a year could increase premiums the following year.

Read the full story online at Idaho Business Review.