More problems hit insurance plan

Friday, March 2, 2001 | 9:51 a.m.

CARSON CITY -- The state health insurance plan, which was near bankruptcy two years ago but has since made major improvements, continues to be plagued with turmoil.

Nevada Highway Patrol troopers want to leave the 56,000-member system, saying the cost of covering their dependents is too high.

Representatives of state workers complain Gov. Kenny Guinn shortchanged the system $3 million in his budget in the coming year, and critics are unhappy that workers who retire from cities and counties are accepted into the state system, driving up costs for the regular members.

"This is the major problem facing this session," said Sen. Ann O'Connell, R-Las Vegas, whose Legislative Commission Thursday rejected for a second time regulations setting the guidelines for groups seeking to bail out of the state plan.

The commission, which must approve regulations of state agencies before they can go into effect, sided with those who said the proposed rules were too stringent and would prevent any group from leaving the system.

O'Connell named a subcommittee composed of Sen. Valerie Wiener, D-Las Vegas, and Assemblymen Bernie Anderson, D-Sparks, and Greg Brower, R-Reno, to see if it could solve some of the problems.

At the heart of the current controversy is the question of retirees on the health plan. Their medical costs are higher than other groups, thus pushing the premiums higher. The proposed regulation would have required any group of 300 or more employees wanting to leave the system to take a share of the retirees.

Wally Tarantino, an attorney for the Nevada Highway Patrol Association, said there was nothing in the law that required a departing group to include a proportionate share of retired. The patrolmen, he said, must pay $250 a month to cover their dependents. They have an opportunity to join the insurance plan of the Southern Nevada Teamsters Security Fund for a premium of $75 for dependents.

Groups from the state Transportation Department, Human Resources and the Department of Motor Vehicles and Public Safety are also considering leaving the health plan, Tarantino said.

But Bob Gagnier, executive director of the State of Nevada Employees Association, told the Legislative Commission "to have an active group pull out and leave retirees is unacceptable."

Gagnier also complained about the law permitting those who retire from local governments to join the state system, saying that pushes up the cost for the other members. "We need a mix," of current workers and retirees, Gagnier said.

Laurie England, chairwoman of the Public Employees' Benefits Program that runs the health plan, said her agency is not trying to stop anybody from leaving.

She said a suggestion that retirees get their own insurance plan would be "catastrophic" because rates would skyrocket and those on pension would not be able to afford the premiums.

Gagnier and Jim Richardson, lobbyist for the Faculty Alliance of the University and Community College System of Nevada, also said Guinn's budget decreases the amount of premiums paid for state workers. Richardson said medical inflation is rising at 12 percent yet Guinn decreased the monthly premium the state pays by $11.50 to $357.25 for the next fiscal year.

The state pays all of the premium for workers, but they must pick up the tab for their dependents. The state would continue to pay the full premium of any employee who left the system for another insurance plan.

Many cities and counties pick up the full tab. Gagnier said Sparks pays $800 a month to cover workers and their dependents.

Richardson said the governor should have at least kept the level of the current premium, rather than reducing it.