Lawsuit Filed Over Changes To State Worker Insurance Program
BATON ROUGE (AP) — A group of state employees and retirees is asking a judge to reverse changes made to their insurance program that cost many workers more out-of-pocket for lessened benefits.
The lawsuit, announced Wednesday, was filed in state district court a day earlier, claiming Gov. Bobby Jindal's administration didn't follow state law in reworking the health insurance plans offered through the Office of Group Benefits.
The new plans took effect March 1.
The lawsuit, assigned to Judge Janice Clark, alleges the Jindal administration didn't give workers and retirees a reasonable opportunity to comment on the changes, violated their contract rights and didn't properly manage the insurance program.
Retiree Marilee Cash, one of six plaintiffs in the lawsuit, said the changes "pose a financial hardship for many people covered by OGB."
"Before March 1, our health care costs and insurance premiums were manageable. Now these increased costs have put health care services out of reach for many dedicated public servants and retirees," Cash said in a statement.
The Office of Group Benefits covers 230,000 state workers, teachers, school employees, retirees and dependents.
Commissioner of Administration Kristy Nichols, the governor's chief financial adviser, disagreed with the lawsuit's claims.
"The plan changes that went into effect in March followed the legally required process, including a public comment forum for members of the community, and we believe the court will recognize that," Nichols said in a statement.
Deductibles and annual maximums for out-of-pocket costs didn't change for people retired by March 1. But higher deductibles and out-of-pocket maximums were enacted last month for active state employees and public school teachers.
Both retirees and current workers have seen higher co-pays for doctor visits, along with new medication restrictions and requirements for prior authorization for certain medical procedures.
And premiums will rise July 1 on average by 11 percent for retirees and employees, who will pay $36 million more annually for health care. The remaining portion of the $130 million increase will be covered by state agencies and the 44 local school boards that cover their employees through Group Benefits.
The moves were used to bolster the insurance program after it nearly drained its reserve fund to cover monthly costs. Group Benefits was expected to be nearly broke by the end of this budget year without cost reductions or an influx of new cash.
The Jindal administration blamed rising health care costs and new federal regulations for the need to rework benefit plans.
"As the cost of health care continues to rise, the Office of Group Benefits balances the needs of its members with its financial responsibilities," Nichols said.
Critics fault what they consider the governor's mismanagement of the program's finances, saying the administration artificially lowered premiums in previous years to indirectly use the Group Benefits reserve fund to help balance the budget.
Named as defendants in the lawsuit were the Office of Group Benefits, the governor's office and the Division of Administration. Plaintiffs are from East Baton Rouge, Lafourche, Ascension and Tangipahoa parishes.
– by AP Reporter Melinda Deslatte