Montana State Employees Face Increased Healthcare Costs in 2027

State employees in Montana will see an increase in healthcare insurance costs come January. However, a recent agreement between the Montana Federation of Public Employees (MFPE) and Governor Greg Gianforte’s office has reduced some of these expected hikes initially announced by the Montana Department of Administration in August.

Individual deductibles will rise to $2,000, while out-of-pocket maximums for individuals and families will increase to $6,500 and $13,000, respectively. The premium increases announced earlier remain, with monthly employee contributions rising by $60 or $100, depending on family coverage.

The state health plan covers around 28,000 people, including state workers, families, and retirees. The fund for paying healthcare claims is depleting, prompting these changes. To address this, MFPE focused on mitigating rate hikes during its recent negotiations with the governor’s office.

Typically, fall discussions between the union and the executive branch center on compensation changes effective post-Legislature. Yet, the healthcare plan’s open enrollment starting October 21 heightened urgency to tackle rising costs. This led to locating additional funds to support the healthcare pool, primarily funded by the state and employees.

The September 22 agreement offsets some planned increases and outlines compensation changes for the next biennium. The state will propose 2027 legislation to boost spending on employee healthcare, including a $30 million fund investment and a 5% contribution hike atop a planned 2.5% increase. For 2028 and 2029, a 7% increase will be proposed.

The agreement will be introduced as House Bill 13 in the 2027 legislative session. Past pay plans have passed with minimal amendments, noted MFPE spokesperson Sam Telling. Both the governor’s office and MFPE praised the agreement.

Gov. Gianforte’s office expressed pride in the deal, emphasizing a commitment to state employees. Adam Haight of LiUNA Local 1686 acknowledged the fair plan amidst rising costs, noting the ongoing burden on workers. Rep. Luke Muszkiewicz remains “optimistic” and plans to monitor the healthcare fund’s solvency through quarterly reports.