SCHOOL EMPLOYEE INSURANCE PROGRAMS, the official text

HOUSE BILL 47

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Raymundo Lara and Natalie Figueroa and Mimi Stewart

and Tanya Mirabal Moya and Brian G. Baca

AN ACT

RELATING TO INSURANCE; AMENDING THE GROUP INSURANCE
CONTRIBUTIONS FOR SCHOOL DISTRICTS AND CHARTER SCHOOLS;
REQUIRING A STUDY OF THE SUSTAINABILITY OF INSURANCE PROGRAMS
FOR PUBLIC SCHOOL EMPLOYEES; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 10-7-4 NMSA 1978 (being Laws 1941,
Chapter 188, Section 1, as amended) is amended to read:

"10-7-4. GROUP INSURANCE--CAFETERIA PLAN--CONTRIBUTIONS
FROM PUBLIC FUNDS.--

A. All state departments and institutions and all
political subdivisions of the state, excluding municipalities,
counties and political subdivisions of the state with twenty-five employees or fewer, shall cooperate in providing group
term life, medical or disability income insurance for the
benefit of eligible employees or salaried officers of the
respective departments, institutions and political
subdivisions.

B. The group insurance contributions of the state
or any of its departments or institutions, including
institutions of higher education, shall be made as follows:

(1) at least seventy-five percent of the cost
of the insurance of an employee whose annual salary is less
than fifteen thousand dollars ($15,000);

(2) at least seventy percent of the cost of
the insurance of an employee whose annual salary is fifteen
thousand dollars ($15,000) or more but less than twenty
thousand dollars ($20,000);

(3) at least sixty-five percent of the cost of
the insurance of an employee whose annual salary is twenty
thousand dollars ($20,000) or more but less than twenty-five
thousand dollars ($25,000); and

(4) at least sixty percent of the cost of the
insurance of an employee whose annual salary is twenty-five
thousand dollars ($25,000) or more.

C. The group insurance contributions of school
districts and charter schools shall be [made as follows:

(1) at least eighty percent of the cost of the
insurance of an employee whose annual salary is less than fifty
thousand dollars ($50,000);

(2) at least seventy percent of the cost of
the insurance of an employee whose annual salary is fifty
thousand dollars ($50,000) or more but less than sixty thousand
dollars ($60,000); and

(3) at least sixty percent of the cost of the
insurance of an employee whose annual salary is sixty thousand
dollars ($60,000) or more] at least eighty percent of the cost
of the insurance.

D. Effective July 1, 2004, the group insurance
contributions of the state or any of its executive, judicial or
legislative departments, including agencies, boards or
commissions, shall be made as follows; provided that the
contribution percentage shall be the same for all affected
public employees in a given salary bracket:

(1) up to eighty percent of the cost of the
insurance of an employee whose annual salary is less than
thirty thousand dollars ($30,000);

(2) up to seventy percent of the cost of the
insurance of an employee whose annual salary is thirty thousand
dollars ($30,000) or more but less than forty thousand dollars
($40,000); and

(3) up to sixty percent of the cost of the
insurance of an employee whose annual salary is forty thousand
dollars ($40,000) or more.

E. Except as provided in Subsection H of this
section, effective July 1, 2025, the group insurance
contributions of the state or any of its executive, judicial or
legislative departments, including agencies, boards or
commissions, shall be eighty percent of the cost of the
insurance.

F. Effective July 1, 2013, the employer shall pay
one hundred percent of basic life insurance premiums for
employees, and employees who choose to carry disability
insurance shall pay one hundred percent of the premium.

G. The state shall not make any group insurance
contributions for legislators. A legislator shall be eligible
for group benefits only if the legislator contributes one
hundred percent of the cost of the insurance.

H. An employer shall pay one hundred percent of the
employee group insurance contributions due and payable on or
after July 1, 2016 for an employee who is injured while
performing a public safety function or duty and, as a result of
the injury, is placed on approved workers' compensation leave.

I. As used in this section, "cost of the insurance"
means the premium required to be paid to provide coverages.
Any contributions of the political subdivisions of the state,
except the public schools and political subdivisions of the
state with twenty-five employees or fewer, shall not exceed
sixty percent of the cost of the insurance.

J. When a public employee elects to participate in
a cafeteria plan as authorized by the Cafeteria Plan Act and
enters into a salary reduction agreement with the governmental
employer, the provisions of Subsections B through G of this
section with respect to the maximum contributions that can be
made by the employer are not violated and will still apply.
The employer percentage or dollar contributions as provided in
Subsections B through E of this section shall be determined by
the employee's gross salary prior to any salary reduction
agreement.

K. Any group medical insurance plan offered
pursuant to this section shall include effective cost-containment measures to control the growth of health care costs
and maximize benefits for the least cost. If a state agency
that is responsible for providing state employee health
benefits under the Health Care Purchasing Act establishes a
reference-based pricing program for in-network or out-of-network hospital services, hospitals subject to the program
shall not charge or collect from a member of the health benefit
plan an amount in addition to the maximum payment established
by the secretary of health care authority, except that a
hospital may charge an amount for cost-sharing that is
authorized by the terms of the member's health benefit plan.
The responsible public body that administers a plan offered
pursuant to this section shall report annually by September 1
to appropriate interim legislative committees on the
effectiveness of the cost-containment measures required by this
subsection.

L. Within available revenue, school districts,
charter schools and participating entities pursuant to the
Public School Insurance Authority Act may contribute up to one
hundred percent of the cost of the insurance of all employees
and institutions of higher education may contribute up to
eighty percent of the cost of the insurance of all employees.

M. When the secretary of health care authority
submits the health care authority's annual budget request to
the legislature, the secretary shall include a budget request
for purchasing state employee health benefits that has
actuarially sound rates for the following fiscal year.
Beginning July 1, 2025, the secretary shall set actuarially
sound rates sufficient to cover projected claims, subject to
legislative appropriation. By September 1 of each year, the
projected actuarially sound rate adjustment for the following
fiscal year, subject to legislative appropriation, shall be
communicated to the local public bodies [who] that are part of
the state employee health benefit program.

N. The secretary of health care authority shall
establish a program to make state health benefit premiums more
affordable for certain employees using appropriations from the
health care affordability fund. The secretary shall establish
a system for determining eligibility for the program and may
annually update program eligibility and contribution criteria.

O. By July 1, 2026, the health care authority shall
ensure that state employees are provided the opportunity to
purchase a variety of health benefit plans with varying plan
designs and cost-sharing options."

SECTION 2. Section 22-29-10 NMSA 1978 (being Laws 1989,
Chapter 373, Section 5, as amended) is amended to read:

"22-29-10. GROUP INSURANCE CONTRIBUTIONS.--

A. Group insurance contributions for school
districts and charter schools [and participating entities in
the authority] shall be [made as follows] at least eighty
percent of the cost of the insurance. Group insurance
contributions for all other participating entities in the
authority shall be:

(1) at least eighty percent of the cost of the
insurance of an employee whose annual salary is less than fifty
thousand dollars ($50,000);

(2) at least seventy percent of the cost of
the insurance of an employee whose annual salary is fifty
thousand dollars ($50,000) or more but less than sixty thousand
dollars ($60,000); and

(3) at least sixty percent of the cost of the
insurance of an employee whose annual salary is sixty thousand
dollars ($60,000) or more.

B. Within available revenue, school districts,
charter schools and participating entities in the authority may
contribute up to one hundred percent of the cost of the
insurance of all employees.

C. Whenever a school district, charter school or
participating entity in the authority offers to its employees
alternative health plan benefit options, including health
maintenance organizations, preferred provider organizations or
panel doctor plans, the school district, charter school or
participating entity may pay an amount on behalf of the
employee and family member for the indemnity health insurance
plan sufficient to result in equal employee monthly costs to
the cost of the health maintenance organization plans,
preferred provider organization plans or panel doctor plans,
regardless of the percentage limitations in the Public School
Insurance Authority Act. School districts, charter schools and
participating entities in the authority may pay up to one
hundred percent of the first fifty thousand dollars ($50,000)
of term life insurance."

SECTION 3. TEMPORARY PROVISION--STUDY AND REPORT
REQUIRED.--

A. The legislative education study committee, in
collaboration with the legislative finance committee, the
public school insurance authority, the Albuquerque public
school district, the public education department and the health
care authority, shall conduct a comprehensive study and produce
a final report regarding the sustainability of insurance
programs for public school employees.

B. The study required pursuant to this section
shall evaluate the anticipated future needs of public school
employee insurance programs, including assessing:

(1) the impacts of combining public school
employee insurance programs with other existing public group
health insurance programs;

(2) the necessary agency actions required to
integrate the group health insurance and alternative plans of
the public school insurance authority, the health care
authority and the Albuquerque public school district by June
30, 2029; and

(3) the necessary legislative action required
during the 2027 legislative session to integrate the group
health insurance and alternative plans of the public school
insurance authority, the health care authority and the
Albuquerque public school district by June 30, 2029.

C. The final report required pursuant to this
section shall be completed no later than October 1, 2026 and
shall be provided to the governor, the legislative finance
committee and the public education department.

SECTION 4. APPROPRIATION.--Seventy-three million one
hundred fifty-three thousand nine hundred dollars ($73,153,900)
is appropriated from the general fund to the public school fund
for expenditure in fiscal year 2027 for the state equalization
guarantee distribution. Any unexpended balance remaining at
the end of fiscal year 2027 shall revert to the general fund.

SECTION 5. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2026.

- 10 -