State employee benefits changes near completion
May 13, 2005
A legislative subcommittee made its final adjustments to the Nevada Public Employee Benefits Program budgets Friday, approving the cost of segregating Medicare retirees from other participants in order to lower their rates.
Executive Director Woody Thorne told members of Senate Finance and the Assembly Ways and Means committees the cost of the move will be absorbed by the plan’s reserves in 2006, but that other participants will have to pay the tab in 2007.
That will bump the total premium for active workers by about $20 additional dollars in 2007, but Thorne said 80 percent of that increase will be covered by the state.
The result is that active employees will have to kick in an additional $4 a month on average. A single active state employee, he said, will be asked only for an additional dollar a month.
Thorne also said employees must be eligible for Medicare Part A and Part B to qualify for the lowered rates approved by lawmakers. He said since only 4 percent are ineligible for Part A, that ruling affects 260 people in the state plan.
“There’s going to be a spike because they’ll be paying the same rates as non-Medicare retirees,” he said.
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Thorne said for those retirees, “it would make sense to drop Part B.” That would save them $78 per participant per month and put their rates at the same level as non-Medicare eligible retirees.
The changes were made after more than 2,700 retirees covered by the state benefits plan discovered their monthly costs were going to increase nearly $300 a month over this year’s premiums. Hardest hit were Medicare retirees with spouse who would have ended up paying $510 a month.
Segregating that group from other participants will lower their total monthly cost to $388. While that is still $154 more than they currently pay, it’s $122 less than the original proposal.
The final step in the process is to get the full Senate Finance and Assembly Ways and Means committees to approve the plan, which will formally put it into the benefits program’s budget for the coming two years.
– Contact reporter Geoff Dornan at email@example.com or 687-8750.