Nevada high court reverses ruling on health insurance
21 03 08 - 11:15
CARSON CITY, Nev. - In a decision Thursday affecting health insurance policies of many local government retirees, the Nevada Supreme Court reversed a lower court and said the Las Vegas Metropolitan Police Department must pay a subsidy to a state plan for its retirees.
The high court's 31-page decision overturns a decision by Clark County District Judge Mark Denton, who had sided with Metro in holding that the police department, Nevada's largest, didn't have to pay the subsidy.
Had Denton's decision been upheld, about 150 Las Vegas police retirees could have been forced out of the state's Public Employees Benefit Program.
Leslie Johnstone, head of the state program, has said that without the high court's reversal the total of local government retirees forced to seek more costly alternatives for health care coverage would have exceeded 3,000.
Metro now owes about $1.2 million through March 31 for its 150 retired participants, based on a subsidy cost of about $35,000 a month for the group.
The subsidy varies depending on length of service. A retire with 15 years of service should get a monthly subsidy of about $365 to be part of the state plan. It's an attractive option – some retirees are getting access to health care plans for less than $50 a month.
Several employee groups, including the Nevada State Education Association and the Clark County Education Association, filed legal briefs in support of the state health benefits agency in the dispute.
While the Supreme Court ruling affect many local government employees now in the state health plan, a separate law passed by the Legislature in 2007 makes the issue moot for most current local government employees.
The new law says that the state health plan will stop accepting local government workers who retire after Sept. 1, 2008, unless the agency insures its current employees with the state. That means the option of enrolling in the state plan at retirement goes away for some local government workers, including teachers with the Clark County School District.
In their unanimous decision, high court justices said Denton misinterpreted the subsidy requirement. While state law is ambiguous, justices added that the law must be interpreted broadly so that retirees who want the state coverage can get the subsidy.
State law "must be read in its broad sense as generally granting to local governments authority to provide health insurance to their employees,' justices said. "Consequently, collectively bargained-for health trusts fall within that statute's scope."
"Since such health trusts are statutorily authorized health insurance programs, local government retirees who were previously covered by health trusts and who elected PEBP coverage upon retirement are entitled to the statutory subsidy."