MINUTES OF THE
	ASSEMBLY COMMITTEE ON GOVERNMENT AFFAIRS

	Sixty-eighth Session
	May 22, 1995


The Committee on Government Affairs was called to order at 9:07 a.m., on 
Monday, May 22, 1995, Chairman Bache presiding in Room 330 of the Legislative 
Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the 
Attendance Roster.


COMMITTEE MEMBERS PRESENT:

Mr. Douglas A. Bache, Chairman
Mrs. Joan A. Lambert, Chairman
Mrs. Deanna Braunlin, Vice Chairman
Mr. P.M. Roy Neighbors, Vice Chairman
Mr. Max Bennett
Mrs. Marcia de Braga
Mr. Pete Ernaut
Mrs. Vivian L. Freeman
Mr. William Z. (Bill) Harrington
Ms. Saundra (Sandi) Krenzer
Mr. Dennis Nolan
Mrs. Gene Wines Segerblom
Ms. Patricia A. Tripple

STAFF MEMBERS PRESENT:

Denice Miller, Senior Research Analyst

OTHERS PRESENT:

Douglas Byington, Nevada Association of School Administrators; Frank C. 
	Page, RPEN; Adair Dammann, SEIU; Chris Healy, SEIU/Nevada Division of 
	Wildlife; Bob Gagnier, SNEA; Marty Bibb, RPEN; Jim Richardson, NFA; Perry 
	Comeaux, Dept. Of Administration  


ASSEMBLY BILL 586 - Revises provisions governing committee on benefits. (BDR 
23-1882)

Chairman Bache introduced Mr. Perry Comeaux, Director of the Department of 
Administration, who would testify first.

Mr. Comeaux was in favor of A.B. 586.  He said the bill contained three 
improvements to the existing situation.  First of all, it increases the participation of 
plan members on the Committee on Benefits by increasing the membership from 
five to seven members.  Second, it allows for more uniform method of appointment 
of committee members.  The Governor would still appoint all members, but for the 
employee and retired members, a list of candidates will be submitted and the 
Governor will choose from that list of nominees.  Third, it would allow Mr. 
Comeaux, as Director of the Department of Administration, to designate a 
representative for himself on the committee or at least to attend meetings in his 
absence.  He reiterated his support of the bill and asked for the committee's 
support.

Chairman Bache questioned the fiscal note because it was not in the book.  Mr. 
Comeaux did not remember how much it was, but said it would have nominal 
impact.

Assemblyman Nolan asked what kind of problems were occurring to change the 
board's composition.  Mr. Comeaux replied it was not an administrative bill and it 
was not intended to correct any problems.  He thought it was to improve 
participant representation on the committee.

Assemblyman Neighbors requested a breakdown on the various organizations that 
were part of the Committee on Benefits.  He wanted to know how many 
participants were involved.  Mr. Comeaux did not have that information, but it was 
available and Mr. Comeaux would attempt to obtain it.

Assemblyman Segerblom asked if the Director of the Department of Administration 
would still be able to vote on committee matters.  Yes, Mr. Comeaux responded.

Douglas Byington, Nevada Association of School Administrators, was present to 
support the bill.  The Clark County Administrators Association, insured by the State 
insurance program, had no input or representation on the Committee on Benefits. 
 The bill would allow their group to submit three names to the Governor for 
possible appointment to the board.  Currently, they cannot do this.  He urged 
adoption of the bill.  

Mrs. Segerblom asked if more than 300 administrators belonged to the State 
insurance system.  Mr. Byington answered they were insured by their own county 
insurance.  A number of years ago, Clark County broke away and negotiated their 
own insurance group, affiliated with the State insurance plan.  The 300 plus who 
are out on their own, were rated and insured separately.

Adair Dammann, Executive Director of the Service Employees International Union 
(SEIU), read from prepared testimony (Exhibit C).  She said they currently 
represented about 3,000 state workers.  They felt the bill was needed to address 
some changing realities in the Nevada state work force.  Ms. Dammann mentioned 
there were about 18,000 state employees, 3,000 retirees, and 1,600 employees 
of non-state agencies on the health plan.

Their union has worked very hard to fight for solutions to problems facing state 
government.  The problems with the health care situation have been of paramount 
importance to the union.  At this time, the credibility of this health fund and the 
debate surrounding the health care crisis nationally really demands broader 
participation and broader representation of interested constituencies.  

Ms. Dammann pointed out that no single employee organization was the sole 
representative of state workers. They believe they have earned the right to 
participate in the committee in a formal way.  Not only because they represent 
thousands of state workers, but also because they have established a track record 
of activism on health insurance issues.  Their union was actually founded by 
workers upset over the dramatic health insurance increases in 1992.  

Ms. Dammann mentioned working with the Governor's office and the Department 
of Administration to design an audit of the health insurance system which would 
 provide an overhaul of that system and some rate relief to health plan members. 
 The credibility of the Committee on Benefits needs to be restored in the minds of 
state workers and the national health care crisis needs to be addressed, Ms. 
Dammann stated. 

Chris Healy, Vice-President of SEIU and an employee of the Nevada Division of 
Wildlife, also testified in favor of the bill.  He read from prepared testimony (Exhibit 
D).  In the span of about 16 months, Mr. Healy stated, his health care insurance 
costs doubled.  He now pays close to $3,000 per year for his family's health 
insurance.  The services received, however, have deteriorated.  


In 1992, those rate hikes occurred and it caused a lot of members to drop their 
coverage as they could not afford it.  Mr. Healy became aware at that time he had 
virtually no representation on the Committee on Benefits.  In 1993, facing more 
rate increases, he and 600 state workers converged on the Committee on Benefits 
to protest the rate hikes and the lack of representation on the committee.  
Subsequently, he joined SEIU to implement needed changes for workers as well as 
additional worker representation on the Committee on Benefits.  The desire at this 
time is not to work against SNEA, one of the major representatives of state 
employees, but to work with them and have a place at the debate table to resolve 
the major health care issues confronting Nevada's workers today.

Mr. Bache disclosed he was a teacher from Clark County and his wife was an 
administrative assistant for SEIU 1107, a sister organization representing county 
employees.  He did not think there was a conflict, but wanted all to know.

Marty Bibb, Executive Director of the Retired Public Employees of Nevada, was in 
support of A.B. 586.  Mr. Bibb expressed the bill would bring needed consistency 
 to the selection process of those who serve on the Committee on Benefits.  
Currently, some are appointed and some are named.  The members of RPEN believe 
all members of the committee should be chosen the same way.  All groups covered 
by the State group insurance plan would want to have an effective voice in that 
program, Mr. Bibb claimed.  By allowing each group to submit names to the 
Governor for appointment to the committee, it would bring out the best and most 
qualified people within their organizations to complete the committee.  RPEN is 
comprised of 6,500 members across the state, all former public employees.  Mr. 
Bibb said the passage of A.B. 586 would give retired public employees equal 
footing with the various other groups whose members are represented on the 
Committee on Benefits and whose people are covered by insurance provided 
through their programs.

Jim Richardson, Nevada Faculty Alliance (NFA), supported the measure.  He had 
been on the Committee on Benefits from 1983 to 1989 and was the Chairman for 
those six years.  


He was puzzled that two of the five members of the committee were not appointed 
by the Governor.  When he joined the committee, he was curious why two of the 
five members were not appointed by the Governor.  Upon investigation, Mr. 
Richardson discovered this was the only committee in state government that 
handled large sums of money where that was the case.  This bill speaks to that 
issue, as all members serving on the committee would be appointed by the 
Governor. He was puzzled that there was no local representation for groups 
covered by the plan.  Mr. Richardson came to understand that was a very 
contentious issue.  Many people on the plan felt it was a state plan and no one else 
should be allowed in.  However, it has been the policy of the state and the 
Legislature to allow other non-state employees into the plan for the simple reason 
that many small entities cannot get insurance unless they join with a larger group 
of people.  It was true that the law allowed larger non-state entities to join the plan. 
 A differential rating was allowed for those groups.  

Mr. Richardson has always thought everyone would be better off defining the 
responsibilities of the committee more broadly and recognizing the fact there is 
strength in numbers to get the best insurance deal.  

Mr. Richardson mentioned one other important factor in the bill.  It would allow the 
University professional employees to have a person on the committee by law.  
Although there has always been a University professional representative on the 
committee, it has been by custom, not by law.  Mr. Richardson was not criticizing 
the current incumbent on the committee.  He urged support of the bill.

Mrs. Segerblom asked how many University people were in the system.  Mr. 
Richardson thought there were about 3,000 professionals in the system as well as 
many classified workers, also represented by SNEA and the SEIU.  Including 
retirees, the total for the University system would probably be about 4,000 to 
5,000 members.

Assemblyman Tripple declared she was a retired state employee.  She asked why 
the change from annual leave to accrued leave on page two, line 16.  Mr. 
Richardson did not know, but suggested Mr. Bache might.  Chairman Bache said 
the reason for changing from annual to accrued leave was if an employee was 
added on, he or she may not have enough annual leave accumulated to use and 
other types of leave would be permitted to be used.

Bob Gagnier, Executive Director, State of Nevada Employees Association (SNEA), 
was opposed to the bill.  One of the reasons they were against the bill was if the 
legislation was passed, it would institutionalize what used to be the State health 
plan, as the public employee health plan.  Initially, the plan started out as a State 
health plan, but because there was nothing available at that time for small, local 
governments, they were allowed to come into the State's plan.  Now they can 
obtain insurance elsewhere.  Mr. Gagnier said once you allow people to come into 
the plan, they will eventually want to participate in it.  Employees want 
representation and next employers will want someone on the Committee on 
Benefits as well, Mr. Gagnier emphasized.  He drew a comparison with the Public 
Employees Retirement System where this has already occurred.  He said this was 
a serious objection to the bill.  

Another objection Mr. Gagnier pointed out was SNEA's opposition to the Governor 
appointing the members of the Committee on Benefits.  He felt that would give the 
Governor control of the health plan and that would not be in the public employees' 
best interest.  Mr. Gagnier said the Committee on Benefits has taken drastic action 
in the past and it was because the administration refused to fund health insurance 
adequately.  They drew down the reserves, there were no contribution increases 
provided in the Governor's budget, and the next session the Governor proposed a 
$10 increase in health insurance; not sufficient to pay the benefits.  The problem 
was under-funding in the budget.  This session, the Committee on Benefits has 
asked the Legislature to subsidize the dependent's premiums.  But when asked its 
position, the administration responded they opposed it and the Senate Finance 
Committee amended it out of the bill last week.  Mr. Gagnier reiterated they do not 
want the Governor making the committee appointments even if the representatives 
are nominated because if there is no direct appointment, the people who are 
appointed will be more in tune with the Governor's philosophy rather than with the 
employees' philosophy.  

Mr. Gagnier said if the Legislature felt inclined to pass this legislation then a 
provision should be included in the bill to allow unions such as SNEA to set up their 
own health insurance plan, get the state contribution and do their own thing for 
their own people.  He remarked it was not a case of more people making a better 
situation.  A plateau is reached, Mr. Gagnier interjected, and more people do not 
really help.  He opposed the erosion of the plan by local governments and local 
government retirees.  Every session they have to fight off the attacks of local 
government and perhaps it would be best to allow SNEA to set up its own health 
plan.  

Mrs. Segerblom pointed out SNEA did not have all five members on the board.  Mr. 
Gagnier told her it was two members.  Mrs. Segerblom iterated he kept referring 
to the plan as the state's.  Mr. Gagnier stressed it was the state plan for state 
employees.  Now, with this proposed board, it would not be for state employees 
anymore, it would be for public employees.  Mr. Gagnier said it was no secret; they 
want them out of the state's plan.  They need their own plan.  Mrs. Segerblom 
pointed out they currently do participate in the plan.  They do, Mr. Gagnier replied, 
over their objections.

Mr. Bennett wanted some numbers reflecting the total number of SNEA members 
in the plan.  Mr. Gagnier told him his best bet would be to check with the Director 
of Personnel for those figures.  Mr. Bennett reiterated how many SNEA members 
were on the plan.  Mr. Gagnier said there were 3780 active members and 300 
retirees in the plan.  

Mr. Neighbors questioned whether the Committee on Benefits broke down the 
figures on the premiums versus the losses of the various entities involved.  Yes 
they do, Mr. Gagnier replied.  Are those numbers available?, Mr. Neighbors asked. 
 Mr. Gagnier said they were and could be obtained from Risk Management.  Mr. 
Neighbors wondered if the state had a better premium/loss ratio than the others. 
 The last Mr. Gagnier heard, they did have a better ratio; local governments were 
costing more.  The committee cannot break out the real small groups.

Mrs. Freeman reiterated the premiums went up in 1992 because the cost of health 
care had risen and the funding for the agency was inadequate.  Mr. Gagnier stated 
the way they did it was to lower the amount the employee rate was helping pay 
for the overall plan.  That left two choices; increase the amount the employee paid 
for dependent care or curtail benefits.  The Committee on Benefits chose a 
combination of those two.  That was necessitated less by the increase in medical 
costs than by the fact that there was no increase in funding for the 1991 session 
so all the reserves had to be drawn down and the employees had to make up the 
difference.  At the present time there was still a subsidization that was voted by 
the committee because the increase in the family rate was so great.  They do not 
subsidize the single parent with children or the spouse rate; only the family rate.

Mrs. Freeman questioned where the money came from to subsidize this.  Mr. 
Gagnier answered it came out of the single person rate.  The current single rate is 
$226.50 paid by the state.  Out of that, $11 goes to subsidize the family rate.  
Mrs. Freeman thought Mr. Gagnier said there was an effort this year to have the 
general fund put some money into the committee fund to relieve the situation.  Mr. 
Gagnier said it was not just the general fund.  All agencies pay into the health fund. 
 They had introduced a bill, S.B. 301, that would have provided for the state to pay 
a certain amount for the employees' coverage.  Then if the employee covered his 
or her dependents, they would have paid an extra $75.  It was the latter amount 
that was under contention in the Senate and the Budget Director advised the 
Senate Finance Committee.  The administration was opposed to it because of the 
$11 subsidy and it was not necessary.  


Mrs. Freeman wanted clarification on the 1992 rate hike adjustment.  Mr. Gagnier 
said many of the problems at that time were caused by the State Industrial 
Insurance System's failure to raise their rates over the years.  Because of the effect 
it had on the health insurance, the Committee on Benefits had been forced to raise 
their rates.  Mrs. Freeman said now that the audit has been done, if the Committee 
on Benefits were not to be changed, how would this audit affect any changes on 
the committee.  Mr. Gagnier told her he was not a member of the committee so he 
could not speak for them.  The one provision recommended by the audit was the 
Committee on Benefits should be taken out of the Department of Administration. 
 Mr. Gagnier said when they were first able to get the concept of self-funding 
passed by the Legislature in 1975, Jim Banner, an Assemblyman at the time and 
Risk Manager for Clark County, put something in the bill to the effect the 
committee would consult with the State Risk Manager.  As the self-insurance fund 
and the complexity of awarding bids grew, other staff had to be hired and the Risk 
Manager took over more control of the plan.  This occurred more by osmosis rather 
than intent.  Several years ago, SNEA members tried to get the plan out from under 
the budget office because one of the members of the committee is the Director of 
Administration who is the supervisor and appointing authority of the Risk Manager. 
 A motion was made and passed to take the Committee on Benefits out of the 
Department of Administration.  That was one of the most forceful things mentioned 
in the audit, along with the recommendation that the Committee on Benefits should 
appoint its own Chief Executive Officer.  That proposal was accepted by the 
committee and was incorporated into the budget.  However, the Assembly Ways 
and Means Committee does not want to permit it.  Mr. Gagnier said  Senate 
Finance was agreeable.  Other proposals were in the audit indicating the committee 
must take more control and supervise the staff, not the Director of Administration.

Mrs. Lambert asked if this would be a new position.  Mr. Gagnier answered yes. 
 It was in a new budget category and a new budget was being proposed so the 
Committee on Benefits would have a staff of one.  By the next session, that would 
switch all the people currently in Risk Management doing Committee on Benefits 
work over to work under the new position.  

Assemblyman Ernaut questioned whether the bill from last session had a Director's 
position in it.  No, Mr. Gagnier replied, it did not.

Chairman Bache closed the hearing on A.B. 586.

Mrs. Krenzer announced the subcommittee meeting on A.B. 444 and A.B. 506 
would take place immediately upon adjournment of the meeting.

Mr. Ernaut said the next subcommittee meeting on A. B. 332 would be at 3:30 
p.m. on May 29.

The meeting was adjourned at 10:03 a.m.


            

RESPECTFULLY SUBMITTED:



	
Denise Sins,
Committee Secretary

APPROVED BY:





Assemblyman Douglas A. Bache, Chairman





Assemblyman Joan A. Lambert, Chairman

Assembly Committee on Government Affairs
May 22, 1995
Page