After four years of battles - including one lawsuit - and extensive maneuvering with the Legislature, the state Benefits Committee refused Wednesday to let a group of Nevada Highway Patrol troopers and other workers out of the state benefits program.
The group of 337 employees organized by the Nevada Highway Patrol Association believed it had met every legal requirement of the 1999 law. Several members of the benefits committee, including some who voted against letting them leave, agreed. Those requirements included proving their departure wouldn't cause a huge increase in the cost to those workers remaining with the state plan.
The 1999 law allows groups of 300 or more to leave the state benefits plan for a private plan if they can prove their chosen plan is solvent, provides adequate benefits for the workers, and as long as actuarial experts say their leaving won't cause a 5 percent or more increase in costs to those remaining with the state.
Many expected the 5 percent rule to be the showstopper, because the NHP group averages 10 years younger than state workers and is rated 39 percent healthier.
But AON, the program's actuarial consulting firm, told the committee Thursday the NHP group's departure would cause only a half-percent increase in costs to those remaining with the state.
Company experts said the main reason the effect is so small is that the 337 employees with their dependents represent just 755 of the total 56,778 individuals insured under the state benefits plan.
Despite the recommendation, committee members argued the 337 employees joining the Teamsters' benefits plan this year could grow significantly every year - rendering the projections meaningless.
And they said the Teamsters were taking a disproportionate number of young, healthy workers and their families, leaving the state program with older, sicker and more costly workers.
Members including Garth Dull said that may not cause a huge effect this year but would grow more significant over time.
Gary Wolff, representing Teamsters' Local 14, said Teamsters' lawyers would ask the benefits committee to reconsider its denial in January in hopes of getting approval so the group can leave July 1 and join the Teamsters' plan.
Otherwise, they could be forced to wait a full year before trying again.
Wolff said the Teamsters' plan provides younger workers with families a better medical plan than the state. Union officials, however, admit it is less attractive to older individuals and single workers with no dependent children.
Benefits Committee Chairman Terry Johnson said he was concerned the effect would change dramatically during the 2005 open enrollment when many more state workers could join the Teamsters' plan.
"We're making the decision on 337 leaving," he said. "If that grows to 600 or 900, there could be an adverse fiscal effect on the overall plan."
Committee member Randy Kirner said the plan should take more retirees with it than the 17 listed among the 337. And even the half-percent effect, Kirner said, would cost those still in the plan $36 a year.
Bill Anderson of the state's budget office and Myla Florence of the Department of Employment, Training and Rehabilitation said letting the group leave would open the door for more problems in the state health benefits program.
"I see this as the beginning of the erosion of an already fragile plan," Florence said.
Only members Angus Mac Eachern and Christopher Campbell voted to allow the group to leave the state program for the Teamsters' health plan.
"We went along with everything they asked us to do," Wolff said. "The denial was based on nothing to do with what the regulations or the laws say."
"It was obvious individual members were looking for reasons to justify saying no," said NHP association lawyer Wally Tarrantino. "Every mandatory requirement was met."
Contact Geoff Dornan at nevadaappeal@sbcglobal.net or 687-8750.