Future state workers’ health insurance subsidies in doubt

Wednesday, May 18, 2005 | 9:48 a.m.

CARSON CITY -- Senate Democrats failed Tuesday to soften Gov. Kenny Guinn's plan to eliminate retiree subsidies for health care coverage for those state workers hired after July 2006.

Senate Minority Leader Dina Titus, D-Las Vegas, and Bob Coffin, D-Las Vegas, offered an amendment to Senate Bill 484 that called for a two-year study of the issue before any action was taken. That lost on an 11-10 vote, with Republican Sen. Mark Amodei of Carson City joining the Democrats.

Titus and Coffin offered a second amendment to set up a deferred compensation plan for future employees in which the state would contribute up to $5,000 a year on a matching basis so that workers would have money for health insurance when they retire. That also failed 11-10.

The Senate did adopt on a 17-4 vote an amendment by Amodei that the state insurance commissioner would have to regulate the plan. Sen. Bob Beers, R-Las Vegas, said the proposal would lead to higher premiums for active state employees but lower rates for those retirees with Medicare.

Only Beers and Republicans Bill Raggio of Reno, Barbara Cegavske of Las Vegas and Sandra Tiffany of Henderson opposed the Amodei amendment.

The bill is expected to be voted on Thursday by the Senate.

Coffin, in urging adoption of one of the two Democratic amendments, said the bill would die in the Democratic-controlled Assembly unless changes were made. He said the proposed study or the deferred compensation plan would keep the measure alive and open to discussion.

Titus said the issue needed to be studied to determine future impacts, such as making it harder to recruit employees. She said delaying a decision for two years would not make much difference.

Raggio, in opposing the amendments, stressed that the bill would not affect any present employees. Nevada is one of the few states that give a subsidy to its retirees to pay for the state health coverage. Raggio also said new government accounting rules will mean the present subsidy system will cause an unfunded liability.

"It will have serious implications on our bond rating," Raggio said.

He said a study will delay a decision and make the problem a "lot worse."

Titus said the deferred compensation proposal would provide a "safety net" for future state workers who could save enough money to pay the future health insurance premiums.