Agency urged to pay ex-workers’ premiums
With hundreds of state workers facing layoffs, Office of Group Benefits board member Kenneth Krefft offered a suggestion Wednesday at a board meeting.
Krefft said the office’s $469 million in reserves should be used to temporarily pay health insurance premiums for state government employees who lose their jobs through budget cuts.
“Look at that and see if there’s something we can do without breaking the bank,” Krefft directed officials with the state Office of Group Benefits. The office provides health and life insurance to about a quarter-million current and retired state employees and their dependents.
For now, Krefft’s idea of extending what he called “a nice gesture” is just a suggestion.
The board took no action on the idea, which would seem to require a rewriting of state law.
State law dictates that the office’s reserves can be used to pay claims but not premiums.
The Jindal administration is proposing a $25.5 billion state operating budget for the fiscal year that starts July 1. The spending plan would eliminate 6,371 state government positions, 3,078 of which are vacant.
Two state prisons would close. A third prison and two centers that care for the developmentally disabled would be turned over to private companies.
At the Office of Group Benefits, the number of positions would shrink from 327 to 150 once a private company is hired to manage a health plan that insures more than 60,000 people.
The preferred provider organization is the only one of the office’s health plans currently managed by state government employees. A private company — referred to as a third party administrator in state government lingo — is expected to start managing the PPO at the beginning of next year.
Board Chairman James H. Lee said he invited Commissioner of Administration Paul Rainwater to attend Wednesday’s board meeting or to send a representative to explain the proposed changes.
Lee said Rainwater never responded to the request. Rainwater oversees the daily operations of state government for the governor as head of the Division of Administration.
Rainwater’s spokesman, Michael DiResto, said the commissioner was busy. DiResto said Charlie Calvi, whom Rainwater hired to run the Office of Group Benefits, attended the meeting.
“The commissioner simply had a schedule conflict … We will, of course, discuss it with the board the closer we get to beginning the process” for a third party administrator, DiResto said.
The board mustered a quorum for the first time since August. The meeting was held in a packed boardroom at the Office of Group Benefits’ headquarters off Florida Boulevard near downtown Baton Rouge.
Lee said he was assured 12 years ago when the Office of Group Benefits was placed within the Division of Administration that the office would not become a political football. He said that assurance apparently was inaccurate.
The governor initially wanted to sell the Office of Group Benefits’ book of business to a private company. That idea generated controversy and concerns that premiums would increase to bolster a private company’s profit margin.
Amid the uproar, Jindal dropped the sale idea and instead decided to pursue a third party administrator for the PPO.
“We will lose some people,” Lee said Wednesday of the 177 positions that will be lost at the Office of Group Benefits.
Calvi told the board that he is working on a layoff plan that will be presented to the state Department of Civil Service for review. A final decision on eliminating state jobs would be made by the Civil Service Commission.
He said he probably will have a better idea at the end of March of how many people are at risk of losing their jobs.
“We don’t know any exact numbers … That’s to be determined,” he said.