Combining public employee benefit plans considered

Uniting all of Nevada's public employees under one benefits plan is being considered by members of the legislative committee studying the state's health insurance system.

Public Employee Benefits Program Director Woody Thorne said the system would then have more than 120,000 workers under its umbrella and probably upwards of 180,000 insured when spouses and children were added in. There are now about 30,000 insured.

Committee Chairman Sen. Mark Amodei, R-Carson City; and members Pete Goicoechea, R-Eureka; and Tom Grady, R-Yerington; all said uniting the various public health plans into one would improve services and reduce costs. They were joined by Scott MacKenzie of the State of Nevada Employees Association, who said the best candidates to start putting together a unified plan would be state workers and teachers.

A larger plan would be more stable and less vulnerable to financial ups and downs and would have better negotiating power for lower rates from providers.

Increased stability, Amodei said, might help avoid the financial swings the board has experienced in the past few years.

Those swings, caused in part by unusually large claims in 2003, forced the state to pump more than $40 million into the benefit plan since 1999 to bail it out. But the program currently has artificially lowered rates to spend down a surplus of more than $50 million.

Assemblywoman Bonnie Parnell, D-Carson City, a retired teacher, said a unified plan would also save money by reducing the staff members needed by each school district to manage their benefits plans.

"Let's put them together," Goicoechea said. "It clearly makes sense."

"I would favor going under one plan," Grady said. "And if they pull out of the plan, each entity ought to be responsible for their employees and their retirees."

Under present law, many governmental entities and school districts in the state have effectively dumped their retirees on the state system. Thorne said that creates an unnaturally large number of retirees in the state system and retirees typically require more health benefits than younger, healthier workers, which drives up costs for all those in the state plan.

MacKenzie said if lawmakers don't like the idea of a unified plan, they could consider a modified version that pools all public employees for claims in excess of $50,000, but allows them to operate individual plans for smaller claims and benefit needs.

Thorne said key issues include whether to make participation in a unified plan mandatory by local governments and school districts and whether to offer a base plan and allow those entities to bargain collectively for enhancements to the base plan.

Amodei said the committee needs to thoroughly review the proposal so it can intelligently recommend whether to combine all the public benefit plans in Nevada and how to do so.

n Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.