Under a new law signed Wednesday by Gov. Greg Gianforte, school districts across Montana will begin working on the creation of a statewide insurance trust aimed at driving down the cost of health benefits for teachers, administrators and other public school employees.
House Bill 332, sponsored by Rep. David Bedey, R-Hamilton, directs $40 million in one-time funds into establishing that trust, provided that a minimum of 150 school districts with a collective pool of 12,000 employees agree to participate. The bill, which passed the 2023 Legislature with bipartisan support, was crafted by a coalition of Republican and Democratic lawmakers and state education organizations, including the Montana School Boards Association.
Lance Melton, the association’s executive director, told Montana Free Press Thursday that he’s already heard from districts eager to get involved.
“This bill is going to create an amazing, once-in-a-generation opportunity for school districts to collaborate together and solve a problem that’s been plaguing us for years,” said Melton, referencing the historic instability of benefit payments shouldered by districts.
Final approval of the trust, per HB 332, will come from the office of Montana’s state auditor and insurance commissioner. Once that approval is granted, the $40 million will be released to the trust by Montana’s superintendent of public instruction.
In an email statement to MTFP, Gov. Greg Gianforte hailed the new law as a direct benefit to the financial lives of teachers throughout the state.
“Teaching is a calling, and we’re committed to taking better care of those who help our kids reach their full potential,” Gianforte said. “With this investment, teachers in Montana have a tremendous opportunity to reduce their health insurance premiums and keep more of what they work hard to earn.”
Reached Thursday, Bedey characterized HB 332 as a key piece of education policy from the 2023 session, one that’s poised to give districts the “financial power” necessary to negotiate and provide for lower health insurance costs.
“This was extremely important bipartisan legislation that will contribute much towards improving compensation for teachers by keeping the costs of health insurance down,” Bedey told MTFP. “House Bill 332 will be touching school districts throughout the state.”
Given the level of enthusiasm he’s glimpsed among school officials, Melton anticipates the trust will come together “much quicker than the 2026 deadline” stipulated in HB 332. And the process will likely get a lift from the 40-year-old Montana Unified School Trust, a statewide insurance pool governed by MTSBA and local school officials that currently provides self-funded health coverage to 180 Montana school districts.
By Melton’s calculations, if enough of those members team up with a few larger Montana districts, it should create enough “purchasing power” to get HB 332 off the ground. Melton said the existing plan is the “closest approximation” to what the new law envisions. The new trust, he added, will be “bigger, better, more structured,” and more capable of absorbing the sudden spikes in premium costs that districts have experienced intermittently over the years. Once the new trust is established, he said, the existing plan will be dissolved.
While the creation of a statewide trust has been a sought-after item for education advocates for years, changes made to HB 332 during the session left some of those advocates nervous. For Montana Federation of Public Employees President Amanda Curtis, the most disquieting changes were a series of reductions in the amount of state funding HB 332 directed to the effort — down to $40 million from an initial ask of $60 million.
“Montana’s teachers and school employees are being crushed by high insurance costs,” Curtis told MTFP via text. “It’s one reason we see new graduates and career educators flee to other states. It’s disappointing the Legislature failed to fully fund HB 332, reducing the incentive for districts to join. We hope districts still choose to participate.”
Also among the latest dash of bills signed by Gianforte was House Bill 587, a property tax measure related to school funding that was sponsored by Rep. Llew Jones, R-Conrad. The measure redirects a pot of property taxes collected to equalize funding between school districts across the state — known as the “95 mills” — from the state’s general fund into a special account earmarked specifically for public education. Roughly a third of that money will go toward lowering county taxes levied for elementary and high school retirement funds. Melton, who helped craft and lobby for the bill, said the changes will ensure that the 95 mills are used to “help keep other property taxes down.”
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