Insurance system shows turnaround

Friday, Oct. 8, 2004 | 9:50 a.m.

CARSON CITY -- The health insurance system that covers state workers and their dependents, which was near insolvency twice in the last six years, showed a $46 million turnaround in fiscal year 2004.

"To my knowledge it's the best shape the fund has been in in its entire history," said Jim Wells, chief financial officer for the State Public Employees Benefits Program.

The insurance plan covers 53,000 state workers and their dependents.

The system went from a $15 million deficit for fiscal 2003 to $31 million in the black in the most recent fiscal year that ended June 30, Wells told the public employees benefits board Thursday.

An audit presented to the board by Certified Public Accountant firm KBCA of Carson City said the system received $200.1 million in the fiscal year ending June 30, compared with $181.7 million in the prior 12-month period.

In the most recently ended fiscal year, operating expenses totaled $154.2 million. In the prior year, operating expenses totaled $181 million.

To keep the system solvent, the 1999 Legislature allocated an extra $23 million and in 2002 added $18 million more.

Wells said $17.3 million was saved last fiscal year because there was less use of the system. He said large claims paid were also down $10.2 million. And the cuts in benefits helped save $9 million last fiscal year.

A large claim is described as anything above $10,000 paid for an individual in the system.

The system, said Wells, is fully funded, meaning it has enough in reserve to pay off medical claims if the insurance plan was ended today. It has a reserve of $43.7 million, he said.

The 2003 Legislature approved $244.4 million for this fiscal year to pay for coverage of state workers who must pay the premiums for their dependents. The appropriation provides a monthly subsidy of $558 for each state employee this year.