Nevada Senate approves bill to solve public retiree ‘orphans’ problem

The Senate on Saturday unanimously approved legislation designed to finally take care of the state’s retiree “orphans.”

Those individuals are non-state retirees who aren’t Medicare eligible who joined the Public Employees Benefits Program after leaving local employment. That pool of people has been dramatically reduced since the state changed the law to prohibit non-state workers from joining the PEBP plan upon retirement unless their employer had its active members in the state plan. That caused the number of active workers in that pool to decrease to the point where nearly all members in the group are now retirees. As a result, their premiums for health insurance have skyrocketed.

SB552 first aligns the premiums those workers pay with the state’s non-state, non-Medicare retirees. Then it requires those local governments to contribute added funding to those retirees, increasing by 25 percent of the cost each year over a four-year period.

Sen. Joyce Woodhouse, D-Las Vegas, said state General Fund money would cover the difference until 2022 when local governments would have full responsibility for the cost of benefits for their retirees.

“This piece of legislation will solve for us the orphan issue we’ve talked about for a number of legislative sessions,” she said.

At the same time, the Senate passed SB551, the bill that contains the PEBP funding for the coming biennium. It provides monthly subsidies of $743 a month in 2018 and $741 in 2019. For retirees not Medicare eligible, the subsidies would be $445 and $451. Medicare eligible retirees would get $180 a month in each year if they retired before 1994 and $240 a month if they retired after that.

The bills go to the assembly.