A new performance audit from the North Carolina Office of the State Auditor (OSA) has confirmed actuarial projections showing growing net losses and a cash deficit for the North Carolina State Health Plan for Teachers and State Employees.
The State Health Plan provides health coverage to nearly 750,000 state employees and retirees. Actuarial projections from 2024, which were used for financial forecasting by the State Treasurer’s Office, showed net losses for the State Health Plan of $199 million, $507 million, and $862 million for 2025 through 2027. Ultimately, the projections showed the State Health Plan having a $949 million cash deficit by the end of 2027.
OSA conducted a performance audit which confirmed the projections were done in accordance with Actuarial Standards Board practices and were reasonable and accurate.
“At the request of State Treasurer Brad Briner, the State Auditor’s Office provided our expertise with an independent examination of the financial forecasting of the State Health Plan,” said State Auditor Dave Boliek. “The work of our team verified the prior assessments. With the projections confirmed accurate and in accordance with professional standards, the scope of the issue at hand is now demonstrably clear.”
“Ensuring the financial solvency of the State Health Plan has been a top priority for me since day one in office,” said Treasurer Brad Briner. “I appreciate the Auditor’s team verifying the size and scope of the deficit that we are facing. State employees, retirees and their families deserve a transparent assessment of the finances of the Plan they rely on, and the information provided in this audit confirms that we are on the right path.”
As stated in the performance audit, the State Health Plan attributed the net losses to three main factors, including increases to medical and pharmacy costs, the state budget including $240 million less than what was requested, and more than $316 million in COVID-19 expenditures not being reimbursed by the State.
The full performance audit, including a response from the State Treasurer’s Office, can be viewed here.