Premiums rising for dependents, state retirees

Wednesday, Sept. 27, 2000 | 10:48 a.m.

CARSON CITY -- Health insurance premiums for more than 20,000 dependents of state workers and retired state workers are going up Jan. 1.

The state Public Employees Benefits Program Board agreed today to boost the rates for dependents of state workers by 4.3 percent and for state retirees by as much as 12 percent.

State government pays the full premium for active employees, who pick up the cost of their dependents.

Jan Marie Reed, executive officer, said the dependent premium is being raised because costs to the dental program ran 7 percent over budget for the last year. Rates for retirees are being raised to offset medical inflation, which ran 17 percent to 20 percent in the last year.

She said the program "tightened its belt," but it still needed the added money because of rising medical costs.

The board, headed by Lauri England, decided to retain a "blended system," keeping active employees and retired workers together in computing rates. Consultant The Segal Co. had recommended setting rates for retirees separately, which would have meant higher rates for those on pensions.

Reed said rates for retirees are now subsidized from 68 percent to 100 percent by the system. The board authorized Segal to study what the health care costs are for retirees and to project them into the future. England said she knew that the cost of insurance for retirees was a "political and emotional issue" but the board was given the duty to run a financially sound system.

The 1999 Legislature pumped $26 million into the insurance program, which was near bankruptcy. England said improvements have been made, but "we're not out of the woods yet."

The state now pays $368 per employee per month for health, life, dental and vision. The program is requesting Gov. Kenny Guinn to raise that 9.8 percent. Don Heilman of Segal told the board that part of the $368 premium paid by the state goes to finance 50 percent of the dependent program, with the employee picking up the other half.

The program has a reserve of $12 million to meet emergencies, but experts say it should be $25 million because of the size of the program.

There are about 56,000 members under the state insurance program, including 28,000 either active or retired state workers. There are also some local governments that cover their workers under the plan. The rest are dependents.

The board's action means state workers who want to cover their spouses will pay $125.24 a month, up from $120.08. For a retired state worker, the premium will rise from $296 to $331, an 11.8 percent increase. But the state contributes part of the insurance premium, depending on the length of service in government.

The board also selected Health Plan of Nevada and Pacificare as the HMOs that system members can join in Southern Nevada. It named St. Mary's and Hometown Health for those in Northern Nevada who do not want to be covered by the self-funded policy.

But state workers in Northern Nevada who choose an HMO will now have to pay part of the premium. If the premium of the HMO is higher than the state's contribution, the employee will have to pay the remaining amount. But those higher rates are only in Northern Nevada.

Reed said there will be an open enrollment period in November for every member of the system. There will be lots of choices, she said, with HMO and preferred providers.