SPRINGFIELD — Setting up a possible constitutional showdown, a joint legislative commission voted Wednesday to reject what it said was a new policy moving large numbers of state employees and retirees into a state self-insurance program.

The bipartisan Commission on Governmantal Accountability and Forecasting voted 8-3 to not advise and consent to the move. The vote is seen as a rejection of the Quinn administration and a victory for now for Urbana-based Health Alliance, which had opposed the state's awarding of new health insurance contracts that did not include Health Alliance.

The move came after the state Executive Ethics Commission on Tuesday rejected protests by Health Alliance and Humana over the bidding process for state insurance contracts.

But Sen. Jeff Schoenberg, D-Evanston, said he believes the administration will go ahead and award new health care contracts scheduled to go into effect July 1, raising the possibility of a major constitutional rift that would end up in the courts.

"I think the (state) attorney general will most definitely advise Director (Julie) Hamos (of the Department of Healthcare and Family Services) to proceed ahead," he said. "The view of the attorney general's office is that the ship had long sailed when it came to the commission considering whether we could in fact enter into self-insured agreements."

The motion to suspend the policy of allowing the state to self-insure its employees and retirees was introduced by Sen. Matt Murphy, R-Palatine, one of 12 COGFA members.

Murphy, who said he was not convinced of estimates of $102 million in savings in the first year of the new program, said he hopes the Department of Healthcare and Family Services rebids its health insurance contracts, and extends current health care coverage agreements.

"I think if we can get all sides in this process and maybe do a rebidding, you're a lot more likely to do just that," he said. "But if people are in court and suing each other, they're a lot less likely to want to cooperate in continuing coverage, I suspect."

Murphy said he believes that only COGFA can authorize a state move to self insurance.

Sen. Dale Righter, R-Charleston, said the commission's vote should send a strong message to the Quinn administration.

"Particularly at this time of the year we sometimes struggle to find examples of bipartisanship but we had one here," said Righter, who is not a member of the commission. "I hope the governor's office and the director of the Department of Healthcare and Family Services takes a look at this bipartisan rejection of their suggested policy here and does what is not easy in politics and that is to retreat and say, 'You know what, this wasn't right and we're going to start the process over again.' That's the right thing to do here."

Sen. Mike Frerichs, D-Champaign, a COGFA member, said he thinks the commission has the authority "to reject a major change in policy that this move to self-insurance reflects."

He said he believes Attorney General Lisa Madigan's recent opinion said that "COGFA can advise and consent to changes in policy, and this is a change in policy. We did not agree to it. We did not consent. Therefore they cannot move in that direction."

Without the self-insurance program, Frerichs said, "what's left is not enough to constitute a state group health program. Therefore they need to rebid."