Employee-benefits program turns finances around
Auditors say the Public Employees-Benefit Program has made a dramatic financial turn-around in the past year and now has a fully-funded reserve of nearly $44 million to cover any major expenses.
According to CPA Craig Ganger, the program which provides benefits for more than 50,000 public employees and their families in Nevada went from a $15 million deficit on June 30, 2003, to a $31.5 million positive balance this past June – a $46 million turn-around.
Jim Wells, of the benefits program, credited changes in use by participants as well as changes in design that raised co-pays and deductibles for participants. The Benefits board made those changes reluctantly a year ago after agreeing they had to do something to stem the losses.
Wells said the plan saved more than $10 million as large claims fell off dramatically. Large claims, where the plan was required to cover such things as liver transplants and major heart surgeries, rose dramatically beginning about two years ago and dipped deep into the plan’s reserves. Those claims went back to what plan managers consider more normal levels this past fiscal year.
Utilization changes and changes in plan design accounted for about $26 million of the improvement but Wells said there were improvements in many areas of program’s operations that helped with the overall improvement.
As a result, he said, the plan finished the fiscal year with reserves of $43.7 million – the amount experts recommend. That includes the $24 million needed for catastrophic situations and $20 million to cover the “incurred but not reported” obligations of the plan – the costs of services patients have received, but which haven’t yet been filed as claims by medical providers.
“This is the best shape the fund has been in plan history,” said Wells.