State employees to see reduced insurance benefits

By Cy Ryan

Thursday, Aug. 7, 2008 | 3:20 p.m.

CARSON CITY -- The more than 41,000 public employees covered by Nevada’s health insurance plan are going to see reduced benefits and higher premiums starting in July 2009.

Nearly $58 million will be cut from the budget of the Public Employees Benefits Program because of the financial troubles plaguing the state’s economy.

“This is going to gore everybody’s ox,’’ says Jackie Ewing-Taylor, a member of the benefits board.

Officials said where those cuts will be made will be announced in September and November. The board lamented that half of the plan’s deficit will be come from reductions in the benefits and the other half in increased premiums.

The system covers state workers, their dependents, retirees and some local government employees.

The first casualty was expanding the program to include domestic partners coverage, including same-sex couples.

The board had twice previously voted to provide coverage for this group. But that would have cost the state $8.6 million over the next two years. And Gov. Jim Gibbons sent word he did not favor expansion of the system because of the state’s fiscal troubles.

Board Chairman Todd Rich said the governor would not include the $8.6 million needed to extend the program in his next budget to the Legislature in January.

Jim Richardson of the Nevada Faculty Alliance in the university system said including the domestic partners in the insurance program would help in recruitment. He said the Clark County Teachers Association covers this group in its insurance coverage.

Richardson suggested starting the program small by including only same-sex couples. That would cost about $3 million or one-third of the full cost.

But Julia Teska, a member of the board, said there’s been no evidence that it helps recruitment and this is an enhancement of a system that is facing cutbacks. Board member Randall Kirner said the state was in an “economic freeze” and the issue should be tabled until there is improvement.

The state coverage includes health, prescription, dental, vision, mental health, substance abuse, life, accidental death and dismemberment. Including the premiums and the state contribution, the cost is about $1 billion a year.

The state currently contributes $626 a month for each state employee and $410 per month for each retired state employees. There is also a subsidy to help cover part of the cost of dependents

Jon Hager, budget officer for the insurance plan, told the board the suggested reductions will keep the system operating. It is estimating that medical and prescription claims will increase by 9.5 percent next fiscal year and 9 percent in fiscal 2011.

Inflation is expected to be 10 percent per year on medical items.

Gov. Gibbons has ordered all state agencies to produce 14 percent cuts in their budgets for the coming two years. And programs in other agencies are going to suffer similar fates.