The Fourth District Court on Thursday appointed Idaho Department of Insurance Director Dean Cameron as the rehabilitator of the depleted Idaho School Benefit Trust.
Cameron now has full control of the trust and its assets. Its five trustees and benefits manager Debbie Hainke are forbidden from “transacting any business” of the trust, according to the order of rehabilitation signed by Judge Lynn Norton.
Cameron’s authority now includes:
- Control over all of the trust’s assets, bank accounts, funds, property, contracts, and all books and records, including computer and electronic data.
- Authority to execute all documents and to liquidate all assets to pay liabilities, expenses and claims.
- Full power to direct, manage, hire, and discharge directors, officers, employees, consultants, and agents of the trust.
- Authority to prosecute, defend or become party to legal proceedings that may be necessary for the collection or recovery of the trust’s property.
- The ability to pursue legal remedies, if it appears there has been criminal conduct.
- The ability to perform any and all functions that Cameron deems necessary to effectuate rehabilitation.
The Idaho School Benefit Trust is a self-funded healthcare plan that more than 100 school districts and charter schools participated in during the 2025-26 benefit year, which ended on Aug. 31.
The trust ran out of money this year and can’t pay claims. The department in early August began investigating how that happened.
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Cameron on Aug. 25 filed an order finding the trust was in a hazardous financial position to the public or to policyholders after discovering that the trust was insolvent. Two days later he filed a petition asking the court to approve an order of rehabilitation, allowing the state to take over control of the trust.
Norton, in Thursday’s order, found there was “good and sufficient” cause to approve that petition.
“The rehabilitator shall have absolute, exclusive and complete control over such accounts and other assets,” Norton wrote.
As part of the “cure” that Cameron ordered in the Aug. 25 filing, the trust was required to borrow money from Blue Cross of Idaho and issue a contribution call to its member employers to pay claims through the end of the benefit year.
Member school districts and charters on Sept. 10 had to decide how to pay off the trust’s $13 million shortfall. The first payment or a lump sum is due by Sept. 30.
According to an FAQ on the department’s website, rehabilitation authorizes the department to allow the borrowing arrangement with Blue Cross to proceed.
Norton’s order states the department can terminate the trust’s registration as a self-funded healthcare plan once the period for paying outstanding claims from the 2025-26 benefit year is complete.
The department’s spokesperson, Julie Robinson, earlier this month told EdNews that the department would like to avoid that.
“At this time, it would not be beneficial to the employees of the member districts to terminate the Trust’s registration and effectively liquidate it – which is kind of like a bankruptcy proceeding,” Robinson wrote on Sept. 3.
School districts were not informed that the trust was insolvent until after they were required to renew membership for the 2026-27 benefit year.
As EdNews reported this week, a group of North Idaho superintendents believe the trust intentionally withheld information about its financial trouble until after they were required to renew by July 1. Hainke notified districts that the trust was insolvent on July 14.
“It is deeply frustrating that local educational funding must be diverted to cover the systemic silence of ISBT,” the superintendents wrote.
