State rejects change to Teamsters insurance

Wednesday, Dec. 15, 2004 | 9:36 a.m.

CARSON CITY -- For the third time, a state board that runs the state employees health insurance system, has refused to allow 300 law enforcement workers to switch their insurance coverage to Teamsters Local 14.

Law enforcement representatives convinced the 1999 Legislature to change the law to permit groups of employees of 300 or more to bail out of the state system where they might find lower rates or better coverage.

The Teamsters has been the only one to try. Adam P. Segal, Las Vegas attorney representing the union, said "It's time to get the Legislature to address this."

The directors of the Public Employees Benefit Program, which covers more than 50,000 employees, their dependent and retirees, voted 6-0 against permitting the law enforcement group to leave.

A study by Aon Consulting that advises the board, said the departure of the group would mean an additional impact of 5.63 percent or $1.1 million on the employees who remain in the system.

Board member Bill Anderson said the conclusions by Aon Consulting "make sense," and he did not want to see the departure mean higher rates or lower benefits for the remaining workers.

Gary Wolff, representing the Teamsters Union, said the numbers of Aon are "truly magical" since there was an earlier prediction the departure would mean only a 1 percent impact on the employees. He said only 300 employees leaving the system "will not open the flood gates" for other groups.

Segal and Wolff said the Teamsters health insurance offers lower premiums. Segal said the employees should have the choice to enroll in a cheaper plan.

The state provides a subsidy of $558 per employee for the state plan. If the board had approved the opt-out plan, that subsidy would have gone to the union.

Forrest "Woody" Thorne, executive director of the state's insurance system, said it now has a reserve of $42.5 million. In 1999 and again in 2001, the Legislature had to provide extra money to keep the plan solvent. And benefits were sliced then.

Board member David Smith, in opposing the move, said, "The one thing I can't get away from is the $1.1 million impact on the plan."