Debate on the $5.2 billion state budget began Monday and Haley told legislators that workers should put $16 million into premiums.
The House didn't adopt the proposal as they approved that section of the budget.
State Employees Association Executive Director Joe Benton said state workers would have to pay about $28 more each payday for insurance. He said that's a bad idea.
House members also rejected a Haley proposal asking them to drop plans to put $1 million into the 2012 presidential primary. She said the state's political parties should be able to raise the money for the first-in-the-South contests.
The spending plan backs away from years of efforts to encourage physical education instruction in schools to combat childhood obesity.
The House budget debate includes a 15 percent reduction in state funds for PE. School districts could make up for the lost cash, but they're strapped and no longer have the option of raising taxes like they once could to cover the loss of state money, said Scott Price, a lobbyist for the state School Boards Association.
"It's hard to imagine the districts being able to make up these cuts at the local level," Price said.
Shifting state policy and cash away from supporting physical education leaves no incentive for local districts to step in, said Megan Wolfe, who oversees legislative trends for the National Association for Sport and Physical Education in Reston, Va.
"Why would they?" Wolfe asked. "There has to be an incentive; there has to be a champion."
The national group recommends 150 minutes weekly of physical education. Wolfe said more states and school systems have been struggling to keep up with commitments to physical education in the face shrinking budgets -- even though concerns are rising about obesity and diabetes.
The PE funding is an example public school spending plans put together in a budget proposal that does not include federal bailout cash.
That meant a loss of $174 million for public schools for the budget year that begins July 1.
To patch that hole in public schools, House budget writers want to tap $100 million in reserves. While a total of $12 million would be cut from things such as PE and guidance counseling, the overall Department of Education's budget grows by $87.6 million, with $25 million of that to expand public charter schools.
Price said it was hard to fight the House GOP's push to shift $25 million from traditional schools to public charter schools.
"The public charter school money was going to come from somewhere," Price said.