Benefits plan to ask legislative help for non-state retirees

The 2003 Nevada Legislature will be asked to help fix the huge increases non-state retirees are being hit with to keep coverage under the state employee benefits plan.

"They're probably the smallest group affected by our actions," Benefits Committee Chairman Terry Johnson said Thursday. "But the impact on them is dramatic."

The estimated 1,900 retirees in that group were told this fall they'll have to pay double or triple the amount they paid last year to keep health benefits next year.

For Elizabeth Riseden, that's over half what she collects in retirement benefits. This past year, coverage cost her just over $200 a month. She said her new bill will be $713 a month.

"I just can't afford it," said the former English teacher who retired after a career that included teaching at Western Nevada Community College and Ely State Prison.

Kay Samolovitch, who retired from teaching in Las Vegas, said the premiums will cost a couple $1,435 a month, a retiree with children $1,263 and a family $1,967 a month.

"That's over $20,000 a year for a family," she said. "That's prohibitive. We cannot pay this."

Committee member David Smith told Samolovitch "it gave us no pleasure to vote on these rates." He said, however, that is what is required by existing state law.

Benefits Program Director Woody Thorne said the problem is that existing state law requires those retirees -- who are all retired from non-state governmental service -- to be rated independently of other groups to determine risk and set their rates. And their rates must, as a group, cover their costs to the plan.

"They, unfortunately, had a very bad claims year," he said. "Unfortunately, many of the local governments don't provide a subsidy for these retirees so they bear the full brunt of the increase in costs."

He said the size of the premium change is exacerbated by the small size of the group just over 1,900 retirees.

But Smith and committee member Bill Anderson pointed out it's not entirely the state's responsibility.

"Isn't there at least an equal onus on non state employers to take part in the solution?" Anderson asked.

Smith urged the retirees to go back to the governmental entity where they worked.

"I hope these non-state agencies haven't abandoned their retirees," he said.

"It's a really tough issue," said Johnson. "I really feel for these folks."

Angus MacEchern, who represents non-state members on the committee, described the rate structure for his constituents as "almost prohibitively expensive."

He said part of the problem is that non-state employers don't subsidize their retirees at all. But he said the solution is to set rates for all members of the program as one group.

"If we're going to have a state insurance plan, then everybody that's in it has to be rated together," he said adding that he doubts that would increase state worker rates much at all.

Thorne agreed with Johnson that it will take legislative action to fix. Johnson said one possibility would be "co-mingling" their experience with the larger state retirees group.

Thorne said the benefits program has asked for a bill draft to study requiring local governments to pre-fund retiree benefits. Many local governments in Nevada pay excellent benefits for active employees but, when they retire, shift them to the state plan. He said pre-funding would make local governments help pay for the costs of retiree benefits.