20-05-2025
State Health Plan Trustees advance benefit changes with employees shouldering higher costs
The State Health Plan Board of Trustees has a $500 million deficit to close. As a result, new premium hikes are on the way for employees, retirees and their families to close the gap.(Stock photo by)
State Treasurer Brad Briner has been sounding the alarm for months. Faced with a $507 million deficit, North Carolina's State Health Plan will require a combination of strategies to address the fiscal cliff and ensure the long-term care of the plan's nearly 750,000 teachers and state employees.
On Tuesday, the State Health Plan's Board of Trustees gave its initial approval to a series of actions that would reorient the plan, incentivizing members to use 'bundled' participating providers or facilities.
State employees and teachers would also be asked to do their part by paying higher health insurance premiums starting in 2026.
'We began this conversation in January around premium increases for the first time in eight years, a tack that nobody wanted to take,' said state Treasurer Brad Briner. 'But buried in the materials here, you'll see that what was going to be a $20 (monthly) premium increase at the lowest tier. It's now a $5 premium increase at the lowest tier.'
Briner said significant time has been spent trying to insulate North Carolina's lowest compensated employees from increases as much as possible, while determining the highest and best use of the dollars that are available. Out-of-pocket maximums would not change substantially, he pledged.
The State Health Plan is also taking steps towards eliminating all prior authorizations for independent primary care, another incentive for plan participants.
Thomas Friedman, executive administrator of the State Health Plan, said state employees who are members of the plan can expect several changes in the months ahead. For starters, the names of the most common plans will change.
The 70/30 plan will become the 'Standard PPO plan' with annual deductibles rising from $1,500 to $3,000 for individuals, and families seeing their deductibles rise from $4,500 to $9,000. The average monthly premium would jump from $25 per month to $40 per month and could be adjusted higher based on the employee's salary.
The 80/20 plan will be known as the 'Plus PPO Plan' with annual deductibles rising from $1,250 to $1,500 for individuals, and from $3,250 for families under the current plan rising to $4,500. Those on the 80/20 plan would see their premiums jump from an average of $50 per month to $100. Higher income earners could see a monthly premium of $130.
While the numbers may not be popular with state workers or teachers, trustee Dr. Brad Miller noted that on the private insurance market, individuals are paying an average premium of $119 a month, with families paying a premium of $532.
What members pay for prescription drugs would also rise next year and in some cases substantially. Specialty medications (Tier 5) would increase from $350 under the current 70/30 plan to $600 under the new Standard plan.
Friedman noted that manufacturer coupons exist for many high-end, specialty drugs, allowing patients to pay little or nothing at all.
'Why not have the manufacturers pay more if they're willing to do it?' Friedman offered.
Coverage of the popular GLP-1 weight loss drugs remains 'under development,' but nutrition and weight loss coaching would be available to everyone.
Moving forward, the State Health Plan is working to make it attractive to members – both financially and in terms of access – to engage with preferred providers.
Tuesday's meeting of the Board of Trustees came as members of the state House advanced their own budget blueprint.
Friedman said that both the House and Senate budget proposals have fully funded the requests of the State Health Plan at a 5% premium increase per year.
'Given everything going on in the state and how little the budget increased, we are a substantial portion of that, and we are very grateful that they listened.'
Treasurer Briner also offered praise for the budget proposal emerging from the House.
'The House proposal fully funds the pension plan and increases funding to the State Health Plan to help in our effort to provide affordable, high-quality health care for state workers. Investments made in salary increases and cost-of-living bonuses will help ensure that the state can retain top talent.'
But Tamika Walker Kelly, president of the North Carolina Association of Educators, said that the legislature should step up its funding, rather than ask school employees and state workers to shoulder higher health care costs.
'It's not only unfair, but it is unsustainable,' Walker-Kelly told the trustees.
'We are already facing a critical staffing shortage, more than 8,000 school positions were vacant at the start of this year and one-in-five teachers left the classroom over the past two years. If we increase the cost for those who stay, how will we fill the gaps and who will be there for our students?'
Walker-Kelly said the decision is not simply about numbers on a spreadsheet; it is about the people who keep our schools and state services running.
A vote by the board to set the premiums for 2026 is set for Mid-August. Open enrollment with the new 2026 rates will be October 13-31.
Click here to view the full presentation to the State Health Plan Board of Trustees.
