Idaho Department of Insurance Director Dean Cameron said all options are on the table to address the deficit of the depleted Idaho School Benefit Trust — including taking over management, placing the trust under rehabilitation or winding it down.

“We prefer not to do that,” Cameron told EdNews by phone on Thursday afternoon. “But ultimately, that’s within our authority to do so, and if we can’t find a better solution then that still may be on the table.”

The Idaho School Benefit Trust earlier this month informed its 108 members — school districts, charter schools and other education-related organizations — that it had exhausted its reserves after paying “extremely high” medical claims. Members are now responsible for covering the shortfall.

Benefits manager Debbie Hainke told members the trust is working to “soften the immediate cash impact for participating school districts.” Blue Cross of Idaho is the trust’s third-party benefits administrator. 

The trust is an option for districts and charters purchasing employee health insurance. Members pool their money together in a self-funded trust and can receive rebates if contributions exceed claims, but they also carry risk if claims exceed contributions. 

Cameron said districts and charters that joined the trust chose a less-expensive product where they assume more risk.

“Well, the risk has occurred,” he said. “And so now there’s a responsibility to make sure that the employees of the school district aren’t harmed.”

The Idaho Department of Insurance exists to protect consumers by regulating the insurance industry. That oversight includes the Idaho School Benefit Trust. Cameron said the department has a responsibility to examine financial records to ensure the trust has enough money to pay claims it has committed to.

“That’s part of our duty,” he said. “We have to protect the consumer and make sure that the promises made are kept.”

Eric Fletcher, chief examiner for the department, joined the phone call with EdNews on Thursday, along with Matt Steen, a deputy attorney general. During the interview, Steen informed Fletcher and Cameron that they don’t have to answer questions from EdNews. The two proceeded with the interview.

Fletcher said state law prohibits the department from disclosing some of the trust’s financial information, including the extent of the deficit, but he shared details on what the department knew, and when.

The department reviews the trust’s financial reports at least once a year, he said. The latest audit from August 2025 raised concerns.

“They experienced some really catastrophic scales of loss,” Fletcher said.

Since that audit, the department has discussed with the trust how to remedy the situation. Things got worse last month when the trust reported its more recent deficit.

“I can tell you there is a shortfall, as Ms. Hainke indicated in her message (to members),” Fletcher said. “Claims have exceeded the contributions received, and we are working toward a cure.”

The trust was in a good financial position in 2022, according to a report of examination. But that report mentioned that a new law may impact the trust. The 2022 Legislature passed House Bill 443 to create a fund to help school districts join the state insurance plan. Some took that incentive. Between 2022 and 2023, the trust lost 24 members.

The trust had a $22.5 million fund balance in 2020, but it dwindled to $2.1 million in 2024, according to public tax documents. It’s unclear where the fund balance sits now.

Five trustees, including former superintendents and the financial director of a charter school, sit on the trust’s board. Fletcher said the trustees have a fiduciary duty to make sure the irrevocable trust is solvent.

Cameron said more than one issue created the problem. Multiple decisions contributed to the problem, and the incoming claims were “much more egregious” than anticipated.

The department over the next several months will focus on two aspects, he said.

• “Stop the bleeding” and resolve the deficit to make sure there is enough money to cover claims.
• Evaluate any errors the trust made and make sure claims were processed appropriately.

The process may take several months.

“We’ll have an opportunity for further examination, particularly after we resolve this first step,” Cameron said.