With Chairwoman Sen. Ann O'Connell leading the way, the Legislative Commission on Monday sided with workers and rejected proposed rules for the state Employee Benefits Program.
"Section 13 is a major concern of mine and having been a sponsor of the legislation I do not believe that it complies at all," said O'Connell, R-Las Vegas, referring to the language that would have sharply restricted the ability of employee groups to leave the state program.
She told benefits administrator Jan Marie Reid and Deputy Attorney General Brett Kandt the legislation directed them to draft rules to enable groups of 300 employees or more to use their state contribution to get health and medical benefits elsewhere.
"I feel it's incumbent upon the state to allow these employees their choice of coverage," she said.
The focus is on more than 300 Nevada Highway Patrol Association members who want to move from the state plan to the Teamsters Union health plan. The state plan represents more than 20,000 state workers, their dependents and retirees.
Reid said the proposed regulations were designed to protect all current and former state workers and their families - both those who want to go elsewhere for insurance and those who want to stay with the state plan.
"We are not in any way writing these regulations to be punitive or keep people from leaving, but we believe it important to write regulations that protect all employees," she said.
Kandt said there is a concern that employees would be able to come back to the state plan to cover them if their plan didn't provide for a specific health need.
But O'Connell said she doesn't agree: "If they make that mistake, the state has no further liability."
She was supported by Andrew Brignone, a Las Vegas lawyer who specializes in employee benefits plans.
"I don't think that's a reasonable legal position to take," he said. "If you opt out and elect out, that would be the same as declining coverage. They've established their legal relationship elsewhere.
"That's my view and I'd be glad to defend the state in that case," he said.
Brignone also said his expert opinion is that the regulations proposed by the benefits committee are designed to make it practically impossible for an employee group to leave.
"The purpose of the statute was to give state employee groups the right to choose their own health and benefits plan," he said. "I view the regulations as preventing the statute from being carried out."
Assemblywoman Barbara Buckley, D-Las Vegas, and Speaker Richard Perkins, D-Henderson, agreed that the proposed regulations go far beyond the statute they approved two years ago.
"You folks have some more work to do," said Buckley.
Buckley moved to send the proposed regulations back to the benefits committee for major changes.
Reid said the issues raised Monday will be presented to lawmakers during the 2001 session so they can look at all the ramifications and decide how they want the regulations designed.