Insurance increase for state workers creates emergency

Friday, Aug. 24, 2001 | 10:52 a.m.

CARSON CITY -- Gov. Kenny Guinn may ask the Legislative Interim Finance Committee for an emergency appropriation to help cover an increase in health insurance premiums for state employees that is expected to hit 22 percent by 2003.

"We can't pass 100 percent of that on to the employees," Guinn said Thursday during a meeting of the state Board of Examiners.

P. Forrest Thorne, executive director of the state Public Employees Benefits Program, briefed the examiners board on the financial condition of the system, which covers 50,000 state workers, their dependents and retirees.

The Segal Co., which acts as financial adviser to the program, reported that medical costs are rising 11 percent per year. The Board of Examiners will set the employees' premium rate for the next two years.

Currently the state pays the full premium of $357 per employee. Employees must pick up the cost of dependent coverage. The state also pays a $202-a-month subsidy to retirees to help cover their premiums.

The governor noted state workers received a 4 percent pay raise. But now they could face an 11 percent per year increase in premiums for their dependents.

Thorne was directed to report back to the examiners board at its next meeting in September with some solid figures on the cost of the increase.

The directors of the insurance program meet Aug. 29 in Las Vegas to set the tentative premium costs for the coming year starting Jan. 1.

The governor said he "can't believe" some of the rates that will be facing retirees if the premiums are increased.

In 1999, the insurance program was near insolvency and Guinn and the Legislature allocated an estimated $26 million to bail out the system.

Meanwhile, the examiners board agreed to take a closer look at its policy of allowing some state workers to draw both their salary and their retirement pay in hard-to-fill jobs.

The board last month, without following any criteria, declared that Richard Kirkland, director of the state Department of Motor Vehicles, his deputy, Dave Kieckbusch, and his administrative assistance, Jan Capaldi, all filled positions that were "critical."

This enabled them to stay on the job, keep their salaries and draw retirement.

Requests also were submitted from the state Budget Office and the state treasurer to allow some of their employees to draw pensions, but those were tabled.

Guinn said he wanted to "wait until we've got comparisons from other cities and school districts to make sure we are in concert."