Tuesday, August 31, 2010

PEBP board this Thursday will consider freezing retirement health coverage for current employees


The PEBP Board will be meeting this Thursday at 9 am. In addition to setting premiums for both the HMO plan and the proposed new major-medical-only coverage which is replacing the PPO (at much higher levels), they will also consider cutting off all current and future state workers from earning credits towards health coverage in retirement. Only those who are already retired or who have already qualified for the benefit -- and who are not Medicare-eligible -- would continue to have any support for health coverage in retirement.

Currently, 45 states of 51 (including Nevada) provide some coverage for retired public service workers after a requisite term of service. Of those 45, 19 (not including Nevada) provide full coverage for retired public service workers. (Read more at the non-partisan, Center for State and Local Government Excellence, http://www.slge.org)

Because this is a future benefit, there is no actual short-term savings to the state by cutting this benefit. Proponents of the measure claim there is a $4 billion unfunded liability associated with this benefit; this is only because of a controversial ruling by the Government Standards Accounting Board to require public entities to account for these benefits as current costs. The supposed billions to be saved will only be realized over the course of several generations, during which time the state will have much greater liabilities it is required to meet. (The supposed liability for PEBP and PERS combined over 30 years equals about 4% of the anticipated cost for the state of education and human services over that same period.)

If this proposal passes, it effectively eliminate health coverage in retirement for everyone who has not already worked 15 years or more in the state -- most of our faculty and staff -- and it will leave Nevada as one of 7 seven states that do not make state workers eligible to earn this coverage over the course of a career. This will be not only a huge disincentive to stay and continue to work in Nevada, it will be an outright incentive to leave and go work in another state where one could earn health coverage before retirement.

Concerned faculty should attend the PEBP meeting on THursday (9am, Sawyer building), contact the PEBP Board (attention Randall Kerner, chair), and contact state legislators to voice their concern.

Gregory Brown
Professor of History,
President, UNLV Faculty Alliance

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