The Idaho School Benefit Trust is unable to pay the medical claims its participating member districts promised their employees for the 2025–2026 plan year. The Department of Insurance has declared the Trust to be in hazardous financial condition and has petitioned the Idaho fourth district court to appoint the Department as rehabilitator. So that district employees and dependents are not left with unpaid medical claims, the Department of Insurance has arranged for the Trust’s plan administrator, Blue Cross of Idaho, to lend the Trust the money necessary to pay those claims.
Claims cannot be paid until that loan is issued to the Trust, which is contingent on:
- The Trust issuing a contribution call (which was sent to participating districts on August 20, 2026), and
- Districts agreeing to pay the additional contributions that are necessary to repay the Trust’s loan.
Every participating district must return its payment election to Blue Cross of Idaho by September 10, 2026. Below are the answers to the most common questions being asked by the participating schools and districts.
What your District Needs to Do Now
1. What is my district being asked to decide?
Your district received a contribution call letter stating your district’s share of the Trust’s funding shortfall. You must choose one of two ways to pay it and return the signed election to Blue Cross of Idaho by September 10. You may pay your district’s share in full, which requires no financing and carries no interest. Or you may enter into a financing agreement and pay monthly at $21.74 per member per month.
You are not deciding whether your district owes this amount. Your district agreed to pay the required contributions to fund the Trust when it signed the Employer Participation Agreement. You are deciding how and when to pay it.
Because of the current funding shortfall, the medical claims of district employees and dependents cannot be paid until your district returns its election and becomes current.
2. Why is September 10 the deadline?
Blue Cross of Idaho cannot lend the Trust the money until it has confidence that the Trust will be able to repay the loan in full. There are 16,676 covered participants across the member districts, and the payment agreements must be executed and payment arrangements established district by district before the loan will be funded; without which claims cannot be paid.
September 10 is not a preferred date. It is the last date that still allows the payment of claims to begin again without undue delays and harm to district employees and dependents who are currently facing unpaid medical bills.
3. What happens after we sign?
Once your district’s agreement is executed, you will no longer be considered delinquent on your August 20 contribution call, which will allow the Trust’s claims administrator, Blue Cross of Idaho, to resume paying the claims of your district’s employees and dependents. This process is handled district by district, not all at once. The sooner your district returns its election, the sooner your employees’ claims will begin processing again.
4. Our board cannot meet before September 10. Can we get more time?
Districts should treat this as an emergency matter and use whatever emergency meeting procedures Idaho law and their own bylaws allow.
Extensions will only be considered if a district’s bylaws make it impossible to convene and act by September 10. If that describes your district, send your bylaws and a written explanation to eric.fletcher@doi.idaho.gov as soon as possible.
Your District’s Amount and Payment Options
5. How was our district’s amount calculated?
The Trust’s total shortfall for the 2025–2026 plan year is $11.9 million in unfunded claims. Each district’s contribution call was calculated from its employees and dependents enrolled as of July 22, 2026, as a straight proportion of total Trust enrollment. The amount is not related to a district’s own claims experience.
6. Why does the contribution call say approximately $13 million when the loan is $11.9 million?
The Trust, not the individual district, is the borrower. It is taking on a surplus note of $11.9 million in principal, and the total the Trust will repay Blue Cross of Idaho over the 36-month life of that note, including 6% interest, is approximately $13 million. That is the figure the Trust must be able to service, so it is the figure the contribution call was built on.
An individual district’s cost depends on which option it selects to pay its outstanding contribution amount:
Paying in full costs $714.71 per member, which includes no interest.
Financing costs $21.74 per member per month. Over the maximum 36-month repayment period, that totals $782.64 per member. The difference of $67.93 per member is interest.
7. If we pay the contribution call over time, is that a one-year commitment or a three-year commitment?
The payment agreement your district signs runs for 12 months. The underlying payment schedule can be extended for two additional 12-month periods, if needed. At the end of the first 12-month agreement, your district will owe the remaining balance unless it signs a new 12-month agreement to continue monthly payments. Districts choosing the monthly option should budget accordingly and should not assume the obligation ends after one year.
8. Why is Blue Cross of Idaho charging interest?
The 6% interest applies to money Blue Cross of Idaho is lending to an entity that is currently insolvent, the Trust. It is below what a commercial lender would charge for credit of this kind, and Blue Cross of Idaho is under no obligation to extend it. Districts that pay in full avoid interest entirely.
9. Will our district be assessed again later?
No. The Trust will not come back to districts for more money for the 2025–2026 claims. The contribution call is necessary to fund the Trust up to the point at which stop-loss coverage takes over. Claims above that point are Blue Cross of Idaho’s risk, not the districts’, and therefore no additional assessment will be needed.
10. Does our district still owe this if we left the Trust, or are leaving?
Yes. The obligation attaches to the 2025–2026 plan year, during which every member district participated and every member district’s employees received covered care. A district’s later decision to leave the Trust does not extinguish a debt incurred while it was a member.
The Employer Participation Agreement supports this: it provides that an Employer that leaves or is terminated during the commitment period remains responsible for the remaining contributions through the end of that period.
11. If other districts refuse to pay, does our share increase?
No. Your district’s share is fixed at its proportional amount and does not increase because another district fails to act. Districts that do not pay will be pursued for their own obligations; they will not be subsidized by the districts that did.
12. Can we see our enrollment file?
Yes. Email ISBTAcctTeam@bcidaho.com and Blue Cross of Idaho will provide your district’s list of enrolled employees and dependents.
How the Trust Reached this Point
13. What does it mean that the Trust is self-funded?
The Trust is not an insurance company and the coverage it provides is not insurance. Member districts pooled their contributions, and their employees’ claims were paid out of that pool. If the pool runs short, the districts are responsible for the difference. Because this is not insurance, the responsibility remains with the Trust and its member districts to pay their own expenses.
This structure is stated on the first page of the Employer Participation Agreement each district signed.
14. What is Blue Cross of Idaho’s role?
Blue Cross of Idaho serves two distinct functions. As third-party administrator, it processes and pays claims using the Trust’s money; it is not paying claims with its own funds and is not the insurer of these benefits. Separately, it provides the Trust’s stop-loss coverage, under which Blue Cross of Idaho assumes the risk of claims above a set annual threshold.
It is also, in this instance, providing a path for the medical claims to be paid by an insolvent Trust by providing the loan, contingent on the commitments of the districts to pay the additional contributions.
15. Why didn’t stop-loss coverage prevent this?
Stop-loss is coverage above a set threshold, not from the first dollar. The Trust pays claims out of contributions up to an aggregate attachment point, and the stop-loss carrier pays claims above it. The problem is that the Trust’s contributions and reserves were insufficient to cover the claims up to the attachment point. The contribution call closes that gap.
Preliminary data indicate that the Trust’s 2025–2026 medical claims will exceed the stop-loss attachment point by several million dollars. Those excess claims are excluded from the contribution call because they will be paid by the stop-loss policy, not by the Trust or the member districts.
16. What went wrong?
Based on the information available at this time, the primary cause is that medical claims materially exceeded the projections on which the Trust’s contribution rates were built. Beyond that, the Department is not prepared to assign causes based on incomplete information.
The Department began a financial condition examination of the Trust on August 3, 2026. That examination will identify what happened and will result in a public report. Certified examiners and actuaries are conducting it. The Department understands that districts and other interested parties want answers now and asks that they be allowed to complete the examination and determination prior to assigning blame.
17. When did the Department learn of the problem?
The Department received the Trust’s 2025 annual audit in February 2026, which reported approximately $2 million in surplus, which was a significant and troubling decline. The Trust and its advisors represented at that time that stop-loss coverage would carry the Trust through the contract year. The Department was not informed by the Trust that its cash balance had continued to deteriorate to the point that it could no longer pay claims until July 2026.
18. Why weren’t districts told sooner?
Keeping member districts informed of the Trust’s financial condition was the Trust’s responsibility, discharged through its Trustees. The Department’s oversight of these trusts operates through periodic examinations and quarterly financial statements. It does not have a role in communicating with participating employers as long as the Trust remains solvent and compliant with Idaho law.
The Department of Insurance’s Role
19. What is the Department doing?
The Department has issued a legal order finding the Trust to be in hazardous financial condition and has petitioned the Idaho district court to appoint the Department as rehabilitator. Rehabilitation gives the Department legal authority over the Trust’s affairs, which allows the borrowing arrangement to proceed and enables claims to be paid.
The Department is also conducting the financial condition examination and is available to answer district questions about this process.
20. Will there be a court hearing?
The Department does not anticipate one. Idaho’s rehabilitation statutes do not require a hearing when a hazardous condition has been found, and the Department has asked the court to act on the petition without delay so that claim payments are not held up further. The timing of the court’s decision is determined by the court.
21. Could the Trust be shut down?
The Department has authority to terminate the Trust’s registration for insolvency and noncompliance, and it may do so as explained in the order of hazardous condition. At this time, rehabilitation will allow the Trust to borrow, pay claims, and repay in an orderly way, rather than shutting down the Trust and leaving the claims of district employees and dependents unpaid.
The Trust is no longer authorized to provide medical, dental, or vision coverage to its participating members, and going forward it exists to collect the necessary contribution call for the 2025–2026 plan year and to complete the run-out of its claims. Once this process is complete and all its claims and loan obligations are paid, the Trust’s registration will be evaluated and may be terminated. This is expected to take 36 months.
22. If the examination finds that there will be excess contributions or other moneys after all the Trust’s claims and related expenses are paid, will districts get it back?
Yes. If the examination identifies excess funds compared to the Trust’s liabilities, those amounts will be returned to districts on the same proportional basis used to calculate the contribution call. Further, if the Trust has any assets left after paying member claims and expenses, any such funds will similarly be returned to the districts on the same basis.
23. When will the examination be finished?
There is no fixed date because the scope and depth of the work depend on what the examiners find. It is the Department’s highest priority. The Department is committed to providing as much transparency as Idaho law allows in these situations. It will release information as it becomes available, rather than holding it until the final report.
24. Can we see the Trust’s contracts and financial statements?
The Trust’s quarterly and annual financial statements that have been filed with the Department are public records. The stop-loss agreement, the Trust’s vendor contracts, and related documents are not subject to public disclosure under Idaho law, and therefore the Department is unable to release such documents.
More Information and Additional Questions
All general questions about Idaho School Benefit Trust’s insolvency, rehabilitation, contribution calls and payment agreements should be directed to Eric Fletcher, Chief Examiner at the Department of Insurance at eric.fletcher@doi.idaho.gov.
Questions or requests for census data from Blue Cross of Idaho should be directed to ISBTAcctTeam@bcidaho.com.
The Department of Insurance’s Consumer Affairs section is available to assist with complaints and other general inquiries at ConsumerAffairs@doi.idaho.gov and 1-800-721-3272.