Starting in 2026, the Florida State Employees’ Group Health Self-Insurance Trust Fund is set to run deficits unless some changes are made.
The program is a self-insured health insurance plan managed by the Department of Management Services (DMS) that pays for health insurance claims filed by state employees and their dependents and retirees.
A report by government watchdog and taxpayer research institute Florida Tax Watch outlines where the program is headed and what changes need to be made for solvency.
The current numbers show the Trust Fund is projected to remain solvent through the end of FY 2024-25, but after that, the ending cash balance for FY 2025-26 is projected to be a negative $421.9 million, increasing to a negative $1.5 billion by the end of FY 2028-29. The most recent financial outlooks for the Trust Fund cover the fiscal years ending June 30, 2024, through June 30, 2029.
Tax Watch says the state is facing budget deficits around the corner. For fiscal years 2026-2027, Florida is projected to see a $2.8 billion budget deficit. And it gets worse in FY 2027-28 to $6.9 billion dollar shortfall.
To maintain the solvency of the Trust Fund, it will need an additional $901.6 million.
“The projected budget deficits (will require the legislature to make some difficult choices and waiting until the projected deficits materialize to take action will result in the need for more severe budget cuts,” said Tax Watch.
Over the past several decades, the cost of health insurance available through the State Group Insurance Program (SGIP) has more than doubled. The yearly premiums paid by the subscriber for both single and family coverage have not changed over this period, leaving the state to bear the additional costs.
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