NHP benefits plan denied for third time
December 14, 2004
The Nevada Highway Patrol Association application to turn down the state benefits plan in favor of the Teamsters Union program was denied Tuesday for the third time.
Members of the Public Employee Benefits Program board voted unanimously to deny after being told the departure of more than 450 state employees – a high percentage of them young, male and healthy – would raise the average claim cost for remaining plan members 5.63 percent.
State law prohibits a group from leaving the state benefits program if the effect would be more than 5 percent.
Teamsters spokesmen Gary Wolff and Adam Segal objected saying that number is a fiction designed to block them from leaving. They pointed out the estimated effect a year ago was only two-thirds of a percent.
The difference is in how the effect was calculated. A year ago, consultants calculated the effect on the average claim against the total premiums paid to the plan – more than $176.9 million last year, the majority of it state money.
This year, they figured the effect against the $20.3 million in contributions to the plan last year by participants.
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Employee benefits Director Woody Thorne said that is a realistic way of calculating the potential effect because the appropriation for each employee is set by the Legislature and governor so any increase in costs would be charged to remaining participants.
Segal said the estimated cost of the NHP and other public safety members in the group leaving would only be $1.1 million and that they could make that up out of the reserves.
“A $1.1 million impact would be absorbed through your normal excess funding,” he said.
Thorne said it’s not that simple: “If we were looking at a one-time event, that might be possible. But when you look at a group leaving, that is an ongoing cost.”
He said allowing the NHP group out would cost PEBP at least $1.1 million a year.
Segal said that could be addressed through the upcoming legislative session by getting lawmakers to make up the difference.
Thorne said the benefits program has to budget on what the Legislature provides per employee and must pass on increases in cost to the participants in the plan as it did two years ago.
“This is an ongoing increase in the regular cost to participants,” he said.
He said the other way of handling the increase in costs would be to restructure the benefits plan “so the cost of their leaving is offset by plan reductions.”
Wolff told the board he expected them to reject the group’s petition to leave and charged that they were ignoring the law passed in 1999.
He asked them to “do the right thing” but added that, “I know this is falling on deaf ears.”
He said he was especially upset that the method of calculating the effect of the group’s departure was changed, resulting in an increase of more than 5 percent.
“It makes me sick to my stomach how the figures are manipulated,” he said.
Wolff, who lobbies for the highway patrol association, said after the meeting he would take the issue back to the 2005 Legislature.
He said the group of patrolmen and other law enforcement personnel are simply trying to move themselves and their families into a plan that is not only better than the state plan but less expensive.
Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.
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