The Idaho Department of Insurance has petitioned a state judge to assume control of the Idaho School Benefit Trust, citing severe financial discrepancies between internal reports and an independent audit.
Dean Cameron, director of the insurance department, addressed lawmakers on Tuesday during a meeting of the Idaho Health Insurers Working Group in Boise. He outlined the agency’s request for the court to rehabilitate the self-funded health plan, which provides medical coverage for thousands of public school employees and their families across the state.
The trust serves districts including Lake Pend Oreille and West Bonner County. As of Tuesday, Fourth District Court Judge Lynn Norton had not yet ruled on the department’s petition.
Conflicting Financial Records
Documents released by the insurance department last week reveal a sharp contradiction in the trust’s reported financial health. The entity, which has operated as a self-insured plan since 2015, is required to file unaudited quarterly statements and an annual audit to verify it meets statutory surplus rules.
An unaudited report for the quarter ending May 31, 2025, indicated the trust held $13.5 million in reserves, exceeding the legal minimum of $8.2 million by $5.3 million. Trustee and treasurer Darren Uranga signed that document on Aug. 5. The report also claimed a net gain of $2.4 million for the first nine months of the 2024-25 benefit year.
An independent audit completed three months later presented a drastically different picture. Sorren CPA finished the review on Feb. 23, 2026, and delivered it to the department five days later. The audit showed the trust ended the fiscal year with only $2.1 million in reserves, falling $11.3 million short of the required $13.4 million.
The independent review also identified a net loss of $9 million for the fiscal year, directly opposing the quarterly report’s assertion of profitability.
Fund Depletion and Transition
The trust’s financial collapse was hastened by a single claim payout of $1.9 million. Advisors had previously assured regulators that stop-loss coverage through Blue Cross of Idaho would protect the fund through the end of the 2025-26 benefit year.
However, contributions and reserves were insufficient to cover claims up to the attachment point, meaning the stop-loss protection never activated. The fund balance was completely depleted by July 2026, at which point the trust notified more than 100 member employers of its insolvency.
In response to the instability, trustees voted on Jan. 27 to transition to a fully insured plan through Blue Cross of Idaho for the 2026-27 benefit year. This shift moves financial risk from the self-funded trust to the insurance carrier.
Department Investigation
The insurance department posted 11 documents totaling 152 pages on its website last week following multiple records requests. These files include internal communications and financial statements detailing the timeline of the trust’s failure.
Internal board minutes from April 23, 2026, listed four “Advantages” of the current structure despite the audit showing non-compliance with statutory requirements and significant losses.
Julie Robinson, a department spokesperson, stated in an email on Monday that the agency seeks the opportunity to complete its examination before drawing final conclusions. The department is investigating the circumstances surrounding the trust’s collapse and the accuracy of its prior reporting.
Attempts to reach Uranga or benefits manager Debbie Hainke regarding the discrepancies were unsuccessful.