SB 5793
In CommitteeSenate
Public employee health plans
Concerning employer contributions and incentives for public and school employee health benefit plans.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill responds to Washington’s budget shortfall by eliminating the smart health program and wellness incentives for public and school employees, and by shifting authority over employer health care contribution levels for the 2027–2029 biennium from collective bargaining to the legislature. The goal is to control health benefit costs while maintaining a competitive benefits package.
- Eliminates the 'smart health' program—including its wellness incentive and online portal—effective January 1, 2028, for both state and school employees.
- Bars employees from earning new wellness incentives starting January 1, 2028, though those who meet eligibility requirements by December 31, 2027, may still receive their incentive in plan year 2028.
- Requires the legislature—not collective bargaining—to set employer health care contribution levels for the 2027–2029 fiscal biennium, removing those items from negotiations for that period.
- Amends eligibility rules for health benefits to clarify how different employee categories (e.g., seasonal, faculty, legislators) become and remain eligible, while maintaining core eligibility standards.
- Directs the Public Employees Benefits Board and School Employees Benefits Board to continue developing comprehensive health plans, but without wellness incentives, and to consider cost containment strategies like provider arrangements and utilization review.
Who is affected
- State employees and retirees — State employees and retirees who participate in the state's public employee health benefit plans will no longer be able to earn wellness incentives starting January 1, 2028, and the 'smart health' program (including its online portal and wellness incentives) will be eliminated after 2027.
- School employees and retirees — School district employees (certificated and classified) and retired school employees will lose access to wellness incentives and the smart health program beginning January 1, 2028, and their health benefit contribution levels will be set by the legislature for the 2027–2029 biennium rather than through collective bargaining.
- Public employee labor unions and bargaining coalitions — State employee and school employee unions and bargaining coalitions will lose the ability to negotiate employer health care contribution levels, wellness incentives, and flexible spending account contributions for the 2027–2029 biennium, as those items will be determined by the legislature instead.
- Health Care Authority and Public Employees Benefits Board — The Washington State Health Care Authority and the Public Employees Benefits Board will no longer administer the smart health program or wellness incentives, and will instead focus on designing health plans without those components for the 2027–2029 period.
Pro/Con Analysis
Potential Benefits (4)
By removing health care contribution levels from collective bargaining and setting them legislatively for 2027–2029, the state gains immediate budget certainty and flexibility to respond to the projected shortfall without being locked into negotiated rates. This helps avoid deeper cuts elsewhere in the budget and supports fiscal sustainability in the short term.
FinancialRef: Sec. 1 (Findings); Sec. 4(2)(b); Sec. 5(3)(b); Sec. 6(3)(b); Sec. 7(5)The bill retains core cost containment strategies—such as provider arrangements, utilization review, and health savings accounts—while eliminating only the wellness incentive component. This preserves access to quality care and allows the state to continue managing health plan costs through administrative and structural levers, not just benefit cuts.
HealthcareRef: Sec. 2(2)(a), (d); Sec. 3(2)(i), (iv)The bill clarifies and standardizes eligibility rules for diverse employee categories (e.g., faculty, seasonal, legislators), reducing ambiguity and administrative burden for employers. This improves consistency across agencies and may reduce errors in enrollment or benefit administration.
Local GovernmentRef: Sec. 2(4)(a)–(k); Sec. 3(6)(d)Eliminating the smart health program and wellness incentives is projected to reduce state health benefit costs, directly addressing the budget shortfall. While the fiscal impact is not quantified in the bill, the summary indicates this is a targeted cost-saving measure, and prior analyses of similar programs suggest savings are plausible.
FinancialRef: Sec. 1 (Findings); Sec. 2(2)(c)(ii)
Potential Concerns (5)
Elimination of the 'smart health' program and wellness incentives removes a structured, evidence-based wellness framework that encouraged preventive care and health risk reduction for public and school employees. This may reduce participation in smoking cessation, weight management, and chronic disease prevention programs, potentially leading to higher long-term health care costs and worse health outcomes for participants.
HealthcareRef: Sec. 2(2)(c)(i)-(iii); Sec. 3(2)(b)(i)-(iii)Prohibiting employees from earning new wellness incentives as of January 1, 2028 disproportionately impacts lower- and middle-income employees who relied on financial incentives (e.g., reduced premiums, gift cards, cash rewards) to offset health care costs. These individuals are more likely to be financially sensitive to wellness incentives and less able to absorb premium increases or out-of-pocket costs.
HealthcarePeopleRef: Sec. 2(2)(c)(iii); Sec. 3(2)(b)(iii)Removing employer health care contribution levels from collective bargaining for the 2027–2029 biennium shifts decision-making authority from labor and management to the legislature. While this may improve budget predictability, it reduces employee representation in benefit design and may lead to less tailored or responsive health plans, especially for nontraditional or part-time employees whose needs may be overlooked in legislative deliberations.
Business & EmploymentRef: Sec. 4(2)(a); Sec. 5(3)(b); Sec. 6(3)(b); Sec. 7(5)Allowing only employees who met wellness incentive eligibility by December 31, 2027 to receive incentives in plan year 2028 creates a one-time windfall for a narrow subset of high-engagement employees, while excluding the vast majority of current and future employees. This creates inequity and may demotivate participation in wellness programs going forward.
HealthcareRef: Sec. 2(2)(c)(ii); Sec. 3(2)(b)(ii)The bill amends eligibility rules for school employees (e.g., faculty, seasonal workers) but does not expand coverage or flexibility for local school districts. In fact, by codifying stricter thresholds (e.g., 630 hours/year for school employees), it may reduce local flexibility to serve part-time or intermittent staff, especially in rural or small districts that rely on flexible staffing models.
Local GovernmentRef: Sec. 2(4)(f); Sec. 3(6)(d)
Who Is Most Affected
State employees and retirees—especially those earning ≤$75K/year—will lose access to wellness incentives that helped offset premiums and encouraged preventive care. While core benefits remain, the removal of financial incentives may reduce participation in health improvement programs, potentially worsening long-term outcomes for lower-income participants.
School employees (especially part-time, seasonal, or hourly workers) lose a key tool for engaging in wellness activities. Faculty and substitutes who rely on flexible scheduling may find it harder to qualify for incentives, widening equity gaps in health access.
Unions representing public and school employees lose bargaining power over health benefits—a core component of compensation—reducing their ability to negotiate responsive, needs-based plans. This weakens collective voice in benefit design and may erode trust in the bargaining process.
State agencies and school districts gain predictability in health benefit costs and avoid contentious negotiations over contribution levels for 2027–2029. However, they retain administrative responsibility for implementing eligibility changes and managing employee concerns.
The Washington State Health Care Authority and PBEB/SEBB boards gain streamlined authority to design plans without wellness program logistics, but lose flexibility to adapt benefits based on employee feedback or emerging health trends during the biennium.