State workers will have to pay part of insurance

By Cy Ryan (contact)

Thursday, Nov. 6, 2008 | 3:21 p.m.

CARSON CITY – The more than 43,000 active and retired government workers in Nevada are going to be hit with a $23 million bill to keep their coverage in the state health insurance plan.

The state Public Employees Benefit Board decided Thursday that workers will have to pay more for insurance.

Gov. Jim Gibbons’ directions to cut budgets in the next two fiscal years meant a $50 million reduction in state subsidies and benefits for workers, their dependents and retirees.

The state presently pays 95-100 percent of the premium for an active state worker, depending on the benefit plan selected. The subsidy for dependents is 75-85 percent. And for a retiree, the subsidy is 67-73 percent.

For example, the base subsidy for an active employee is $502 a month for the high deductible plan. And for the low deductible plan, the state pays 95 percent or $532 with the worker chipping in $28.

But now workers are going to pay a greater part of the premium to cut state expenses. The board did not arrive at how much each group would be charged to get to the $23 million in savings.

The groups include the active worker, his or her dependents, the retiree and his or her dependents. In addition to the 34,000 state active and retired employees, there are more than 9,000 local government workers who have joined the state plan. They also will be hit with higher premiums.

The board decided that half of the $50 million reduction would be to changes in the insurance coverage and the rest would come from increased premiums for those enrolled.

Board members discussed how to create the savings.

J. Angus MacEachern, a board member from Las Vegas, suggested that the active workers should pay more than the retired members.

Frank Page, a retired state worker, said the retired employees have Medicare that picks up part of the medical costs, taking the full load off the state plan. “The retirees are not a burden” to the finances of the plan, he said.

A decision on how to allocate the $23 million was delayed until the December meeting of the board.

The board did agree to reduce benefits to save money. The plan has a $500 one-time deductible for most workers and a $1,000 deductible for family. That will go to $725 for the individual and to $1,450 for the family.

The board decided that it would not give extra benefits to those who filled out a health assessment questionnaire. The worker who completed this questionnaire have been getting more dental coverage and a reduction in their deductible.

HMOs that contract with the state to cover employees would be limited to cost increases to five percent to save $5 million.

The deductible, that’s the out-of-pocket expense to the employee, will be raised annually based on 50 percent of medical inflation.

Frank Partlow, executive director of a commission to find savings in government, told the benefits board that it is comparing the state’s health insurance plan with private companies and other states.