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Bill

SB 987

Lower Healthcare Costs.

2025-2026 Session Introduced by Sydney Batch and 5 co-sponsors

Creates a dedicated Fund for State Employee Premium Stabilization to prevent net take-home pay reductions for state employees when health plan premiums rise.

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Bill Summary · SB 987

Summary of North Carolina Senate Bill 987 (Session 2025) – Lower Healthcare Costs

Purpose and intent

  • The bill aims to prevent reductions in state employee take-home pay that could result from increases in premiums for the North Carolina State Health Plan for Teachers and State Employees.
  • It establishes a dedicated fund to stabilize state employee net income in the face of rising health plan premiums.

Key provisions and changes

1) Creation of the Fund for State Employee Premium Stabilization

  • New Section: Adds a new statute, § 143C-9-11, to Article 9 of Chapter 143 of the General Statutes.
  • Intent (a): States the goal of preventing net income reductions for state employees due to premium increases.
  • Establishment (b): Creates the Fund for State Employee Premium Stabilization as a special fund within the State Treasurer’s oversight.
  • Use of Funds (c): Funds are to be administered by the State Treasurer in consultation with the Director of the Office of State Human Resources. The money is to be used to supplement state employee compensation in a way that maintains or seeks to maintain net take-home pay when monthly premiums for the North Carolina State Health Plan increase.
  • Administration Rules (d): The State Treasurer, in consultation with OSHR, will adopt rules for administering the fund.

2) Transfer of nonrecurring funds to support premium stabilization

  • Section 2: Requires a one-time transfer of $150,000,000 (one hundred fifty million dollars) from nonrecurring funds.
  • Source: Funds originate from the State Education Assistance Authority and are taken from the Opportunity Scholarship Grant Fund Reserve for FY 2025-2026.
  • Use: These funds are to be transferred to the Fund for State Employee Premium Stabilization to support the award of scholarships in the FY 2026-2027 year (i.e., a designated use for scholarships, but the money is repurposed to support premium stabilization).

3) Effective date

  • Effective date: July 1, 2026.

Who/what is affected

  • State employees and teachers participating in the North Carolina State Health Plan for Teachers and State Employees, whose net pay could be affected by premium increases.
  • State Treasurer’s Office and Office of State Human Resources, which will administer the new fund and establish its operating rules.
  • Education/shcolarship funds via the transfer from the Opportunity Scholarship Grant Fund Reserve, impacting how nonrecurring funds are used for scholarships in fiscal planning.

Procedural and timeline notes

  • The fund would be created and rules established by the State Treasurer in consultation with OSHR.
  • A substantial one-time appropriation ($150 million) is earmarked to be transferred for the purposes described, with a stated use involving future scholarship awards (FY 2026-2027) while enabling premium stabilization.
  • Effective date of the act is July 1, 2026, meaning provisions would begin in fiscal year 2026-2027.

Potential impacts and considerations

  • Employee compensation stability: The primary impact is potential protection of take-home pay for state employees by mitigating net pay losses from rising health plan premiums.
  • Budget flexibility: Creates a dedicated stabilization mechanism which could influence state budgeting and compensation strategy.
  • Funding source reallocation: The $150 million transfer diverts nonrecurring funds intended for scholarships toward premium stabilization and the 2026-2027 scholarship awards, which may affect scholarship availability or structure.

If you’d like, I can provide a plain-language impact assessment for state employees or a comparison with similar stabilization funds in other states.

Compiled from official sources — confirm details with the bill’s official record.

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