MINUTES OF THE meeting

of the

ASSEMBLY Subcommittee on Commerce and Labor

 

Seventy-First Session

April 16, 2001

 

 

The Subcommittee on Commerce and Labor was called to order at 12:09 p.m., on Monday, April 16, 2001.  Chairman Chris Giunchigliani presided in Room 3142 of the Legislative Building, Carson City, Nevada.  Exhibit A is the Agenda.  Exhibit B is the Guest List.  All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

 

SUBCOMMITTEE MEMBERS PRESENT:

 

 

Mrs.                     Dawn Gibbons

Ms.                     Chris Giunchigliani

Mr.                     David Goldwater

 

STAFF MEMBERS PRESENT:

 

Vance Hughey, Committee Policy Analyst

Cheryl Meyers, Transcribing Committee Secretary

 

OTHERS PRESENT:

 

Danny Coyle, President, State of Nevada Employees Association, Carson City, Nevada

Gary Wolff, Representative, Nevada Highway Patrol Association, Reno, Nevada

Martin Bibb, Executive Director, Retired Public Employees of Nevada, Carson City, Nevada

James Jackson, Attorney and Representative, UICI Administrators, Reno, Nevada

Diana Valdez, Senior Vice President Operations, UICI Administrators, Dallas, Texas

 

 

Assembly Bill 123:  Revises provisions relating to health insurance provided by public employees’ benefits program. (BDR 57-603)

 

Chairwoman Giunchigliani called the meeting to order and commented the audience should have copies of the amendments the committee was suggesting (Exhibit C) after working with the sponsor of the bill.  Ms. Giunchigliani asked Mr. Hughey to help her explain the amendments for the audience.  She stated the amendments Assemblywoman de Braga, the sponsor of the bill, had proposed contained the main issues she was attempting to resolve in suggesting the bill.  Mrs. de Braga wanted to make sure the Public Employees’ Benefits Plan (PEBP) had jurisdiction and was monitored by the Insurance Commissioner so there was someone to help them when there were problems.  She wanted there to be more than one choice of plans available in an area.  There should be certain disclosures made and data that could be gathered when the committee wanted to move forward in processing the cost each employee or an officer would be paying out of pocket.  The subcommittee had attempted to cover all of those points with the amendment.

 

Ms. Giunchigliani commented the intent of Section 23 (Exhibit C) was to include everything that allowed for disclosures and oversights other self-funded plans had discovered as problems.  Section 5 recommended adding to NRS 287 the following concept:  the board had to offer a choice of plans that should include a self-insured as well as a health management organization (HMO).  Subsection 2 of Section 6 stated the board had to provide to any person annual written statements that showed what was being paid on the person’s behalf for group insurance and actual premium rates that were charged to an insurer or a health plan insurer.  She noted in the Committee on Ways and Means there had been difficulty receiving any of the suggested documentation in order to move forward on the budget.  Subsection 3 included any per capita subsidy that was paid under a health plan whether provided by an insurer or by self-insurance or otherwise had to be equalized.  The deduction for the compensation for the person that was eligible to participate in the program was made for the purpose of providing coverage of health care.  To clarify, Ms. Giunchigliani stated one plan should not be subsidizing any other plan. 

 

Vance Hughey, Committee Policy Analyst, indicated in Section 6 there was an added provision.  The provision stated the Commissioner of Insurance could by regulation decide if there was certain other information that could be helpful or might contain precise wording of the intent.  The section would give the Commissioner the ability to clarify the intent.

 

Danny Coyle, President, State of Nevada Employees Association (NEA), had a question for clarification purposes.  When there was a hearing on A.B. 452, Ms. Giunchigliani’s bill that provided access to restricted networks, some of the same NRS chapters were also mentioned.  He remembered testimony from Janice Pine from St. Mary’s Hospital who had testified against that bill.  He wondered if the provisions in A.B. 123 did the same thing as A.B. 452.  Ms. Giunchigliani stated she believed Ms. Pine’s objections were because of the type of contract between a Preferred Provider and an HMO.  She indicated this bill only dealt with the HMO.  The hospital should okay this legislation because it only stated the jurisdiction would be handled by the Insurance Commissioner.  The bill would help employees have a resource or mechanism to take problems to during the interim.  The second issue was to make sure the documentation was available to the enrollee to enable them to have accurate rates of insurance for themselves and their dependents.  There needed to be justification to see where their dollars were going. 

 

Mr. Coyle had attended and testified in the full committee hearing on the bill.  He liked some of the provisions in the bill because it provided for disclosures and information to the users of the plan.  With a cursory look at the amendments he did not see any red flags.  Ms. Giunchigliani stated there were a couple of weeks left to review the bill and the amendment so if he had any other suggestions there would be time for assessment.

 

Gary Wolff, Representative, Nevada Highway Patrol Association, wanted to state for the record his organization supported the proposed amendments.  He especially liked subsection 3 in regard to any per capita paid for the provision of coverage under a plan of health coverage must be equal.  He was also a proponent of discovery of where the funds went and how they were spent.

 

Martin Bibb, Executive Director, Retired Public Employees of Nevada, stated in general terms the intention of the amendments was to bring some additional accountability in terms of tracing and tracking monies received.  He believed that to be very appropriate in trying to bring clarity to where the funds went and that was appreciated.  Ms. Giunchigliani appreciated Mrs. de Braga’s focus on the issues.

 

Assemblyman Goldwater had a question on the new Section 6, subsection 3, of the amendment.  The statement read, “any deduction from the compensation of a person who is eligible to participate in the public employees’ benefits program that is made for the purpose of providing coverage for health care shall be based on the ‘actual cost’ of providing that coverage.”  He was not sure what the phrase “actual cost” meant from an actual insurance concept because there was shared risk and not “actual cost” in any insurance. 

 

Ms. Giunchigliani stated he was absolutely correct; however, when there were shared risks there was a pooling.  When the state decided on a contribution there was a discrepancy between the HMO cost of $290 and the self-insured plans that cost $389.99 per month.  What was the actual cost and where was the decision for the state to contribute $400?  They had not been able to decipher what in reality was driving the actual employee contribution on the part of the state.  The pooling should not occur as a subsidy of self-insured PPO versus an HMO. 

 

Mr. Goldwater indicated in any insurance plan those sort of inequities occurred and it was almost impossible to trace exactly why.  There were a number of different roots, participants, negotiated contracts, eligible populations and the likelihood of people that chose one option over another.  It could be a very daunting task.  Even in his insurance plan there was no way to decipher why the PPO option was so much more expensive than the HMO option. 

 

Ms. Giunchigliani had discussions with some fiscal personnel that believed the results were attainable because there were reports from two of the three types of populations.  They had not yet received information from the self-funded population to justify the amount of money contributed.

 

James Jackson, Attorney and Representative, UICI Administrators, commented their position on A.B. 123 was relatively neutral.  As the third party administrators (TPA) they would perform whatever duties the state directed in order to administer and process the claims under the state’s insurance plans.  He indicated UICI as a licensed TPA would fall under the purview of the Insurance Commissioner anyway.  There were certain disclosures, reports and actions they had to take as a TPA.  When they had failed in a few occasions to keep records current, such as an address change, they had been quickly reminded by the Insurance Commissioner.  He was serving as UICI’s legislative analyst as well as their legal counsel.  UICI made a quarterly report (Exhibit D) of disclosures to the Insurance Commissioner and during the legislative session they made every effort to make those reports available to all members of the Legislature who would have any interest.  He believed the more information disseminated, the better.

 

Diana Valdez, Senior Vice President Operations, UICI Administrators, stated UICI had corporate offices in Dallas, Texas, and a claims office in Reno for state of Nevada claims.  UICI had administration over the medical plan for 45 months of the self-funded public employees of the state of Nevada.  In the fall of 2000 a request for proposal (RFP) was issued by the Public Employees’ Benefit Program office for a new administration system because the system at the time would not be able to accommodate a new enrollment.  When UICI received the bid they had really considered passing on the bid because the timeframe was so short.  They also knew, however, how important it was from the claims side of the issue that the eligibility be correct because if the eligibility did not get into the system in a timely manner, UICI would be injured on the claims side.  There were stiff penalties and guarantees that were put in for performance when they had renewed the contract in January 1999 that could be hindered.  Since that time they had only missed a penalty in one quarter for one month for turnaround time.  They were very pleased they had been able to maintain the standards the committee had placed on the TPA.  There was a concern at the time the eligibility would not be in the system in time so they would have a problem with the medical administration. 

 

Ms. Valdez stated when the bid went out in October 2000 the contract was awarded to UICI Administrators.  The contract was for open enrollment data entry that they had already completed.  It was due to start the first week of November, but did not start until November 27 because the Public Employees’ Benefit Program office had issues in completing the forms and the information that had to be disseminated for open enrollment.  UICI then started out backed up 27 days from what they already knew would be very difficult to accomplish.  The short timeframe caused some backup in medical claims and had employees calling the Reno office for benefits in January.  Currently they had extended their services through May 1 and had continued to do the advertising, the changes, the premium rates, the billing, etc.  However, the Public Employees’ Benefit Program office still handled the customer service, the COBRA and HIPPA. 

 

Ms. Valdez stated they were going to meet with the Public Employees’ Benefit office to do a second training in the following week.  UICI was more than ready to take on more responsibilities in-house if the Public Employees’ Benefit office wanted them to help out in any way.

 

Ms. Giunchigliani asked for any other testimony in regard to the amendments proposed for A.B. 123.  Seeing none, she stated she would accept a motion from the committee.

 

ASSEMBLYWOMAN GIBBONS MOTIONED TO AMEND AND DO PASS A.B. 123.

 

ASSEMBLYMAN GOLDWATER SECONDED THE MOTION.

 

MOTION CARRIED UNANIMOUSLY.

 

Seeing no other business before the committee the Chairwoman adjourned the meeting at 12:29 p.m.

 

 

RESPECTFULLY SUBMITTED:

 

 

 

Cheryl Meyers

Committee Secretary

 

 

 

APPROVED BY:

 

 

                       

Assemblywoman Giunchigliani, Chairman

 

 

DATE: