Deputy Attorney General Deonne Contine and attorney Michael Chaudhuri talk Thursday in the Nevada Supreme Court chambers following a hearing in which Contine argued the Legislature mandated all public employers must subsidize retirees who join the plan. Cathleen Allison/ Nevada Appeal
Whether the Las Vegas Metropolitan Police must pay subsidies for retirees who join the state benefits plan is now up to the Nevada Supreme Court.
But the decision affects more than just the department; it could leave 1,900 teachers in Clark County without benefits and set the standard for inclusion of other agencies that use the state's plan.
The justices heard the case Thursday and have taken it under submission.
Clark County District Judge Mark Denton granted Metro summary judgment in August ruling the department doesn't have to pay the subsidy because their benefits are set in collective bargaining and provided through a health trust that isn't controlled by NRS 287 - the section of law that requires the subsidy.
The Public Employee Benefits Program appealed saying the Legislature clearly intended the subsidy to apply to Metro.
But PEBP Executive Officer Leslie Johnstone said only public entities that are governed by NRS 287 can be members of PEBP. She said because of that, the unintended consequence of Denton's ruling is that all public entities that receive benefits through a bargained trust must leave PEBP.
She said as many as 3,500 retirees now covered, including those in the Clark County School District, would be booted out of the plan.
Deonne Contine of the attorney general's office told the court its interpretation of the issue "will affect hundreds if not thousands of local government retirees."
She said the Legislature in the statute directed local governments including Metro to subsidize their retirees who join PEBP and that the police agency can't escape the requirement.
A brief filed by the Clark County Teachers Association and one from the Legislative Counsel Bureau both argued legislative intent is clear that Metro is supposed to pay.
Johnstone said the 2003 Legislature was clear in its intent all local entities pay a subsidy at least equal to what the state pays its retirees.
Sen. Bob Beers, R-Las Vegas, advised Metro that, it wasn't a question of whether they would pay but when.
Adam Segal, representing Metro, said the collective bargaining agreement already contains a subsidy for Metro members who retire and stay with the plan. He said the trust is covered by a different statute and that the subsidy cannot be legally imposed on Metro for those who leave the plan.
Johnstone said after the hearing there are about 450 retirees who have applied to join the state benefits program who are on hold until the court makes its decision. Contine told the court that the deadline is the end of open enrollment at the end of April.
Chief Justice Mark Gibbons said the court will work to have an answer before then.
Segal said if the court upholds Metro's exemption, those retirees who leave PEBP will be taken back into Metro's plan "if they meet eligibility requirements."
"Metro is not trying to block anyone," he said adding they are entitled to their pre-paid benefits provided through the trust.
He said the Legislature could have fixed the problem in the 2005 or 2007 session by adding language specifically applying the subsidy requirement to collectively bargained plans.
Metro has refused to pay the subsidy while the issue still is in court and, according to Johnstone, now owes PEBP more than $1 million if Denton is reversed.
Clark County has joined the suit on behalf of its firefighters, who also are covered outside the normal benefits program, but has elected to pay while the issue is resolved. The county would get a refund if the lower court decision is reversed.