State employees have been hit with higher than average health insurance premium increases during the current biennium. Union members are invited to join us for a virtual meeting on Wednesday, May 13 at 7pm central time to learn more about the State of Nebraska’s self insurance fund and how we may be able to control future costs through contract negotiations. Click here to register to attend.
In the 2025-2027 biennium state budget, the legislature fully funded our negotiated salary increases, and the legislature included an 11% increase in health insurance funding for each fiscal year. Last year (FY26), we saw state employee health insurance premiums increase by 8%, which was the highest increase in eight years. For the next insurance year (FY27), the premium increase is 15%.
The State of Nebraska is self-insured, without stop loss coverage, meaning, the State fully pays all claims from its own self paid insurance fund. United Health Care and Blue Cross/Blue Shield do not pay the cost of insurance claims. The health insurance company simply facilitates claims. After a year where claims come in at a higher rate than the previous year, it is common for the premium rates to increase to cover those costs.
Our union has negotiated guaranteed minimum levels of coverage in our contract. The state must continue to offer that coverage, and does so through its regular insurance plans. Optional discount programs such as “the wellness plan” or “consumer focused plans” have offered cheaper coverage, but participation is optional, and it’s optional for the state to provide discounted coverage, because it does not meet the minimum coverage guaranteed by our contract. Our union has no control over the cost and volume of health insurance claims.
The State of Nebraska’s self-insurance fund has seen a high level of catastrophic claims over the past two years, which has been a key contributor to higher increases than average. Fluctuations in health insurance premium increases in self-funded pools tend to be cyclical. The ten year history of the employee portion of single premium insurance increases is as follows:
FY17 – 11% – $609 ($25.38/paycheck)
FY18 – 14% – $869 ($36.21/paycheck)
FY19 – 3.3% – $233 ($9.71/paycheck)
FY20 – 3% – $217 ($9.04/paycheck)
FY21 – 2.5% – $187 ($7.79/paycheck)
FY22 – 0% – $0 ($0/paycheck + premium rebate)
FY23 – 4% – $306 ($12.75/paycheck)
FY24 – 4% – $318 ($13.25/paycheck)
FY25 – 4% – $331 ($13.79/paycheck)
FY26 – 8% – $357 ($14.89/paycheck)
FY27 – 15% – $354 (14.74/paycheck)
The minimum levels of coverage that we have negotiated, coupled with high catastrophic claims, can lead to higher than average premium increases. At our virtual meeting, we’ll discuss ways we may be able to control costs by negotiating new contract language. Not a union member? Join your union today and gain a voice in the contract negotiations process.