By Allison Bell, BenefitsPro, 10/2/2026
- Idaho school districts used the trust to provide medical, dental and vision benefits.
- The trust served 16,500 school district employees and dependents.
- The trust was not backed by the state guaranty fund.
Idaho Self-funded Health Trust Fails After Claims Costs Outpace Expectations
An Idaho state court judge has appointed Dean Cameron, the director of the Idaho Department of Insurance, to serve as the rehabilitator for the Idaho School Benefit Trust.
The self-funded trust has provided health benefits for about 16,500 school district employees and dependents at about 100 school districts and charter schools in Idaho.
The trust used stop-loss insurance from Blue Cross of Idaho, which is also the trust plan’s third-party administrator, to protect itself against catastrophic claims, but the cost of ordinary claims was much higher than the trustees had expected, and the trustees warned in June that the fund likely would not be able to meet its obligations for 2026.
The trust reported an operating loss of $13 million on $98 million in employer contributions for the nine-month period ending May 31, 2026, according to a trust financial statement posted by Idaho Education News. The trust started its fiscal year with only $2.1 million in surplus, and it ended the period in the May 31 financial statement with a deficit of $10.5 million, rather than a surplus.
Because the trust was self-insured, it was not protected by the Idaho Life & Health Insurance Guaranty Association, according to a set of answers to questions about the trust’s insolvency.
The trust will use fully insured group health coverage from Blue Cross of Idaho to provide coverage in 2027, Idaho officials said in comments posted on a case information website.
To compensate for the 2026 shortfall, Cameron is imposing an assessment of $782.64 per member. Districts can also choose a monthly assessment payment arrangement.
Some school districts have refused to pay the assessments. The trust has suspended payment of claims for employees and dependents in member school districts that have declined to pay the assessments.
What it means
Cameron has been active at the National Association of Insurance Commissioners. His experiences as the rehabilitator of the Idaho trust could affect how he and other state insurance regulators think about many different kinds of collective benefits purchasing arrangements.
Risk pools haven’t worked out so well for many Texas school districts in the past. The most recent example is the TSHBP risk pool whose short life span violently ended in financial disaster requiring pool members to cough up millions more in unbudgeted assessments to pay for plan shortfalls.
The problem was not so much the failure of the pool, it was the failure of prospective pool members to properly assess the financial condition of the pool before participating in it.
“How can a superintendent or school board, as fiduciaries of taxpayer funds, jeopardize a district’s assets by participating in a risk pool, when they have no idea as to the pool’s financial ability to pay losses?” – Robert Reim
Texas Senator Mayes Middleton has introduced SB 1276 which, if passed, will require risk pools to provide public accountability of a pool’s finances.