Statement of Public Service Workers' Benefit Coalition on PEBP budget closing

The Benefits Coalition includes the Nevada Faculty Alliance, Nevada State Educators' Association, AFSCME local 4041, the Retired Public Employees of Nevada, and several other advocates for public service workers. Yesterday it sent the following letter to legislative leaders concerning the budget for the Public Employees' Benefits Program.

The Benefits Coalition that was formed earlier in the session is appreciative of the strong statements of support that have been made concerning the PEBP budget and related issues. Particularly the commitments made concerning the recommendations concerning retiree health benefits contained in Decision Unit 661 have been welcomed by both retiree and active employee groups. However, we hope that the concern expressed for the recommendations concerning health benefits of retirees can be expanded to also incorporate the Executive Budget recommendation concerning much lower subsidies for active employees that also is contained within Decision Unit 661.

As you know, the PEBP Board recommendations contained in Decision Unit 660 that cut $53 million from what would be required to maintain the current benefit plan already includes some heavy hits on current active and retiree participants in PEBP. Deductibles are scheduled to nearly triple for most participants, and co-pays are doubling (or even more for some pharmaceuticals). Some benefits have been cut, and rates have been increased for all categories of employees and retirees. These and other changes to PEBP have been supported by more employee and retiree groups, albeit with some reluctance. The changes represent significant increases in costs and cuts in benefits from what was only a “middle of the pack” health plan for state employees and retirees.

SB 415 problems:

We are very concerned about SB 415, the Administration bill that sets subsidy rates for active employees and retirees in PEBP. There are two major reasons for our concern, and we would request that the bill be modified significantly or rejected. First, the subsidy amounts would implement the Executive Budget recommendations concerning draconian changes in PEBP. Those amounts need to be adjusted upward considerably if the Decision Unit 661 provisions are to be rejected, as you have indicated would happen. Also, however, there is some very troublesome language that we have not seen in previous bills dealing with this matter. The “not more than” language (p. 2, lines 3, 5, 22, and 24) is new, and we would request that it be dropped, and the amount for the subsidy that is agreed upon be stated definitely, as has been the case in previous sessions’ bills.

PEBP budget closing

We note that the PEBP budget closing is set for Tuesday, May 5, at 8am. We hope that the closing reflects the commitments that have been made to reject the dramatic changes recommended by the Executive Budget. We urge that no more than the cuts already approved by the PEBP Board be accepted, although we have one issue to raise about that set of proposals (see below).

Service time required for subsidy

One aspect of the PEBP Board’s proposals for the next biennium has been questioned by some employee groups, and by some legislators. That has to do with service time required to obtain any subsidy. The PEBP Board recommended moving the time required from five years (which is the same as required for vesting in PERS) to 15 years. This significant change will impact the ability for NSHE and state agencies to hire experienced mid-career people to fill vacancies, and we understand that this change does not save more than $100,000 this biennium. Therefore we hope that this recommendation might be reconsidered. We think that a 10 year vesting period would be acceptable, but certainly would suggest no more than 12 years being required in order to earn some subsidy.