Lawmakers reject Gibbons' cuts to state worker benefits

Both money committees voted Friday to pass a public employee benefits plan that rejects the deep reductions proposed by Gov. Jim Gibbons.

The PEBP board had worked out and approved reductions totaling $53 million as part of its mandated budget cuts. 

But at the advice of the SAGE Commission, Gibbons went much farther, cutting overall premium support from 95 percent to 75 percent for active employees, eliminating the subsidy for Medicare eligible retirees and reducing the subsidy for non-Medicare retirees by 50 percent over the biennium.

Senate Majority Leader Steven Horsford, D-Las Vegas, said in hearings on the plan those cuts were "not fair, not moral."

"We're not going to accept the draconian cuts proposed by the governor," said Assemblywoman Sheila Leslie, D-Reno.

Lawmakers made it official Friday, adopting the PEBP plan but refusing the additional cuts proposed by the governor.

It's a decision that will require adding $158.5 million to the state budget.

In the Senate Finance Committee, the vote was unanimous. In the Assembly Ways and Means Committee, only Minority Leader Heidi Gansert, R-Reno, voted against the plan.

The reductions adopted by the committee are those developed by PEBP. They shift more cost to the users of the plan. They also raise the deductible from $500 to $725 for a family and $1,000 to $1,450 for a family and eliminate the health assessment incentive.

In addition, the changes eliminate the state subsidy for those who retire with less than 15 years service. Currently the subsidy begins after five years with the state.

"With the reductions in the plan, we think there will be minimal impact," PEBP Director Leslie Johnstone said after the hearing.

With those changes, fiscal staff told lawmakers the state contribution toward active employee health insurance will remain within a few cents of the $626 a month the state pays this year. Johnstone said inflation will drive it up to $680 in the second year of the biennium.

The plan provides health benefits to some 44,000 public employees, their families and retirees in Nevada.

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