The Idaho Department of Insurance has opened an investigation into the Idaho School Benefit Trust (ISBT) after recent documents revealed a dramatic shortfall in the plan’s required surplus. The department posted 11 documents, totaling 152 pages, on its website last week, including an unaudited quarterly report and an independent audit that tell conflicting financial stories.
Quarterly report shows surplus, audit shows deficit
According to the unaudited report for the quarter ending May 31, 2025, the trust held $13.5 million in reserves, well above the statutory minimum surplus of $8.2 million. The report also indicated a net gain of $2.4 million for the first nine months of the 2024‑25 benefit year.
Three months later, an independent audit completed by Sorren CPA on February 23, 2026, painted a very different picture. The audit found the trust was $11.3 million below the legal surplus requirement, ending the fiscal year with only $2.1 million in fund balance— a $9 million net loss compared with the earlier reported gain.
Department seeks court oversight
Department of Insurance Director Dean Cameron told EdNews the agency is “investigating” the discrepancy and has petitioned Fourth District Court Judge Lynn Norton to take over and rehabilitate the self‑funded health plan. As of the latest update, the judge has not yet ruled on the petition.
“We understand that districts and other interested parties want answers now, and we ask for the opportunity to complete the examination and its determinations before drawing conclusions,” department spokesperson Julie Robinson wrote in a Monday email.
Impact on schools and employees
The ISBT provides medical coverage for thousands of public‑school employees and their dependents across Idaho. When the trust’s contributions and reserves are insufficient, the plan relies on stop‑loss coverage from Blue Cross of Idaho, which pays claims above a predetermined attachment point. The department says the trust’s contributions fell short of covering claims up to that point, leaving a funding gap.
In October 2025, Blue Cross reported a $1.9 million medical claim that had originally been billed at $6 million. The trust’s individual stop‑loss limit is $2 million. Additionally, Blue Cross disclosed a $1.1 million accounting error in 2025, which it later allowed the trust to repay over a year.
Board actions and future plans
Board minutes show trustees voted on January 27 to transition the ISBT to a fully insured plan through Blue Cross of Idaho for the 2026‑27 benefit year, which began September 1. Trustee Galen Smyer told EdNews in July, “We thought we were navigating our way through this.”
Minutes from April 23, 2026, list “Stability” as one of the advertised advantages of ISBT participation, even as the audit revealed a significant decline in the fund balance. The same meeting approved a 19.5 percent rate increase, though the minutes only provided the average renewal rate since 2015 (7.6 percent) rather than the specific new rate.
Legal and regulatory context
Idaho law requires self‑funded plans like the ISBT to maintain a minimum surplus— currently $8.2 million— to continue operating in the state. If a plan falls below that threshold, the department has authority to terminate its registration.
Deputy Attorney General Matthew Steen recently sent benefits manager Debbie Hainke a copy of the petition for rehabilitation and a proposed order, which will become public once the court acts.
Next steps
The department says it will continue its examination and will provide further updates as the court process moves forward. Stakeholders, including school districts, charter schools, and employee groups, are awaiting clarification on the trust’s financial health and the timeline for any transition to fully insured coverage.
Original reporting: Idaho Education News — read the source article.
