State workers’ slashed benefits may be restored

Friday, Aug. 6, 2004 | 9:52 a.m.

CARSON CITY -- A committee that oversees the state employees health insurance plan voted Thursday to try to restore some of the benefits that were cut when the system was in financial trouble.

The state Public Employees' Benefits Committee adopted a proposed budget for the next two years of $609.2 million. It suggested that about $19 million be added to restore such things as lower deductibles and better vision and dental coverage.

About 51,000 state workers and their dependents, retirees and non-state workers are in the system, which had to make cuts 18 months ago.

Board member Jacque Ewing-Taylor said the understanding was that the benefits would be restored when the plan was "fiscally sound."

Jim Wells, accounting officer for the insurance system, had said earlier in the meeting that the system expects to have a reserve of about $51 million at the end of fiscal year. This is due in part to a lower amount of big medical claims in fiscal 2004, he said.

Ewing-Taylor said, in light of that, "We would be remiss if we did not consider restoration of some of the benefits we took away." She recommended and the board agreed to include an extra 5 percent in the budget to the Legislature to cover the cost of restoring some of the benefits.

What benefits would be restored would be decided at a later date.

Since the cut in benefits, Ewing-Taylor, who works at the University of Nevada, Reno, said the state and universities have had troubles recruiting and retaining employees.

Board member David Smith suggested that $5 million be tapped from the $51 million reserve immediately to restore benefits for the remainder of this fiscal year, but his proposal did not get any support from the rest of the board.

Forrest "Woody" Thorne, executive director of the insurance program, said it would be "inappropriate" to take money from a reserve fund to finance an ongoing commitment.

The system wants to keep a reserve in the mid-$40 million range to pay for up to two months of claims related to major medical problems. Smith said if the committee did not use the $5 million it would be lost when the Legislature meets.

"We didn't go to the Legislature to cut benefits," Smith argued and added that the surplus was achieved in part because of the reductions in benefits.

The state allocates $558 a month for each employee, who chips in $4.53 as his or her share. The employee must pay for the coverage of his or her family, an cost average of $138 a month per employee. The state subsidizes the health insurance for each state government retiree as well, by an average of $316 a month.

The Legislature sets the dollar amount for the subsidies, and Thorne on Thursday presented a revised formula to the board to base the subsidies on percentages rather than on a specific dollar amount.

To do that, however, the 2005 Legislature would have to change the law, and Thorne said it would not be known until next spring whether the subsidies under this new proposal would increase or decrease for individual members. The board, at its meeting Thursday, also asked for additional information on starting a program to communicate with its members more and get more feedback from them. The proposal would cost about $150,000 the first year, after which it would be reduced to about $50,000 a year. Much of that cost would stem from publication of a periodic newsletter to those enrolled.