After four years of debate and delay, rules paving the way for groups of 300 or more state employees to withdraw from the state benefits plan and join a private program were approved Thursday.
Those rules have been sought since the 1999 Legislature by employees represented through Teamsters Local 14 of Las Vegas -- primarily members of the Nevada Highway Patrol.
Highway Patrol Association lawyer Wally Tarrantino said they would file a formal application to "opt out" of the state benefits plan before the end of the month. Teamsters spokesman Gary Wolff said they want to leave because the Teamsters can provide better coverage for their members at a lower rate. He said Teamsters International has authorized a group of up to 600 to join from the state.
The rules have been on hold four years primarily because of opposition from Public Employee Benefits Program members who fear rates will rise dramatically for those still in the state plan if groups of young, healthy employees "opt out," leaving behind older, sicker employees -- especially retirees.
"From the minute the bill passed in 1999, there has just been an effort to stop this from happening," Wolff told the program board.
He urged them to pass the regulations, saying only then will they be able to calculate the financial affect on the state plan.
The law authorizing groups of 300 or more to "opt out" forbids them from doing so if their departure from the employee pool would cause more than a 5 percent increase in premium or contribution costs to those who remain.
Whether groups leaving should be required to take retirees was hotly debated in earlier discussions of the proposed rules.
Wolff said under the new rules, the Teamsters group will take "a proportional amount of retirees," not just young, healthy troopers and their families. He said that will reduce the financial effect to the remaining members of the state plan.
The Public Employment Benefits Program board made two major changes to the compromise rules before approving them. At Chairman Terry Johnson's request, they removed language allowing groups to challenge the decision in district court. Johnson said the board's decision on such matters has always been and should remain final.
And they decided the state should keep the difference if an outside plan costs less per worker per month than the state contributes. That money, the board agreed, should be kept by the state for reserves, paying outstanding claims and other expenses. Teamsters officials agreed.
Tarrantino said board officials are probably right that, under the current interpretation of the law, the NHP-based group will probably be one of the few to be able to "opt out" because the 5 percent rule is cumulative. That means if his group causes a 3 percent rise in rates for the state benefits pool, the next group seeking to leave would have to show it causes less than a 2 percent additional increase in the rates. Benefits Program Director Woody Thorne said after that total 5 percent is reached, there will be no more groups approved to "opt out."
