American Press, Lake Charles, Louisiana, on scrutiny of group benefits
American Press, Lake Charles, Louisiana, on scrutiny of group benefits:
The insurance program for the state’s 230,000 employees, their dependents and retirees is a major expense and obligation that requires and deserves close scrutiny by the Legislature.
Joint Legislative Committee on the Budget Chairman Rep. Jim Fannin recently said he wants monthly reports on the progress of efforts to stop the continued erosion of a Group Benefits’ reserve fund, which stood at $524 million in 2011 and now is less than half that size.
That added scrutiny is a good thing. Legislators have a duty to watch out for the welfare of state employees and an obligation to taxpayers for fiscal responsibility.
“There is a lot of fear out there among participants in Group Benefits throughout the state,” Fannin, R-Jonesboro, said.
The panel also is concerned because if the funds run out, the state is on the hook to cover expenses.
Travis McIlwain, a legislative fiscal adviser, told the panel that the fund balance as of May 30 stood at about $237.2 million.
Group Benefits has been tapping the reserve account to the tune of $16.1 million monthly to pay insurance claims and other costs because not enough revenues are coming in, he said. In fiscal year 2012, Group Benefits started spending more on expenses than it collected in revenues, he said.
State Rep. Rob Shadoin, R-Ruston, said the administration has a definite “PR problem.”
He said Group Benefits members point to increased premiums and benefit reductions that are on the way and blame it squarely on the program’s privatization.
“They say it was running great until we privatized this thing. Whether it’s true or not, it’s the perception of some,” Shadoin said.
Johnson and McIlwain agreed that the privatization was not the culprit in the diminishing reserves but rather an intentional act by the administration when it reduced premiums.
It is reassuring that the Legislature is on top of this program to keep it in responsible and manageable bounds.