You have to hand it to Commissioner of Administration Kristy Kreme Nichols. When she has something to do, she is completely One Direction-al about it.
As the minutes ticked by during the House Appropriations Committee’s seven-hour hearing on the Office of Group Benefits on Sept. 25, and as Division of Administration (DOA) Executive Counsel Liz Murrill and the rest of the DOA pack occupied themselves by texting during heart-wrenching testimony from those who will be adversely affected by rising deductibles and co-pays, Kristy fidgeted.
She continued to fidget and to be as evasive as possible with her answers to questions from legislators until she suddenly “got an important phone call” and left the committee room. She did not return before the meeting finally adjourned.
In fact, it was not a telephone call that pulled her from the meeting at all.
One Direction, the latest boy band to make little girls squeal, was playing in the Smoothie King Arena in New Orleans and Kristy and her daughter (and possibly some of her daughter’s friends) watched the concert from the special Arena luxury suite assigned to Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Anywhere but Louisiana).
Kristy Kreme at the Smoothie King. Has a certain ring to it, doesn’t it?
Kristy Kreme could have told the audience the truth. Certainly OGB members, mostly retirees, who had traveled from all over the state to testify and to get answers would have understood that a teeny bopper band was more important to Kristy Kreme than the medical coverage of 230,000 state employees, retirees and dependents.
But you see, telling the truth simply is not her style.
Witness her repeated claims that the OGB $500 million reserve fund was reduced to only about half that amount because of Obama Care and rising health care costs. She made that claim repeatedly, blaming those two factors and those alone for the drawdown of the reserve fund when everyone on the committee and those in the audience knew better.
Everyone in attendance knew that three consecutive years of premium reductions in the face of rising costs was the reason the fund has been all but depleted. She would never admit that even though everyone knew that Jindal lowered the rates so that the state’s 75 percent contribution to member premiums would be reduced also, thus leaving money that would have gone to premium payments for Jindal to use to plug gaping holes in his budget.
Remember when Kristy Kreme’s predecessor, former Commissioner of Administration Paul Rainwater wrote that comforting letter to OGB members in April of 2011 in an effort to debunk all those rumors about increased costs and raids on the reserve fund? No? Well, we have it right here: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4F444D324D5441344C6C4245526A51344E7A413D
In that letter, Rainwater said members would continue to receive quality service and coverage, benefits would NOT change, and OGB’s administrative oversight would continue, “securing the continued success of all the plans.”
“As for the allegation that OGB’s surplus will somehow be ‘stolen,’” Rainwater continued, “let me be absolutely clear: this claim is categorically untrue.”
But that was yesterday, as Chad and Jeremy sang back in the 60s, and yesterday’s gone. Let us return to the AWOL Kristy Kreme.
Even as she was invoking her super powers to convince legislators and audience members that she had only the best interest of OGB members at heart and that the depletion of the reserve fund was beyond the control of the administration, the report of Buck Consultants, hired by Kristy Kreme said on page iii of its summary: 
- It is our understanding that the Plan premium rates, used both to determine contributions from the various employer agencies, and to set contributions required from the retirees, were set artificially low to draw down the OGB’s reserve fund, and it is our further understanding that this is a temporary deviation from the Plan’s substantive plan, which continues to provide for the legislated 75-25 cost-sharing under a “full subsidy” from the State. Our valuation anticipates that the 21 percent premium deficiency will be gradually eliminated on a uniform basis over five years from fiscal year 2015 through fiscal year 2019 through increases in retiree premium rates in excess of the underlying assumed health trend. The actuary notes that in the prior valuation at July 1, 2012, the plan incurred a loss of $388 million associated with premium rates lower than anticipated.
For the entire Buck Consultants report, click here. http://www.doa.louisiana.gov/osrap/library/afr%20packetts/2014OGB_OPEBValuationReport.pdf
State Rep. John Bel Edwards (D-Amite) said he had received a copy of the Buck report earlier. “Nothing in this supports Kristy Nichols,” he said.
Edwards has been a vocal critic of the proposed OGB changes, claiming that the increased co-pays and deductibles will create unnecessary hardships on retirees, some of whom are facing co-payments and deductibles higher than their monthly income.
The entire OGB affair has become so confusing that many OGB members were turned away from the first meeting held in Baton Rouge on Monday to explain the changes. Jindal fired about two dozen OGB workers in the last round of firings and Kristy Kreme immediately found it necessary to contract with Ansafone of San Diego, California, and Ocala, Florida which has been trying to hire 100 people in each state to man telephone banks to answer questions about Louisiana’s plan.
Kristy Kreme has already found it necessary to dispatch one OGB employee to San Diego to train Ansafone employees and now $107,000-a-year OGB Chief Operating Officer Bill Guerra is in San Diego conducting training sessions on how to answer questions from OGB members.
DOA, by the way, is supposed to be strapped for cash and there is a statewide freeze on out of state travel but apparently found it necessary to send Guerra to California for a month.
So, let’s recap:
- Jindal fires most of the OGB employees, including director Tommy Teague, and turns over a perfectly smooth-running agency to Blue Cross/Blue Shield (BCBS) with promises of no changes in benefits or premiums.
- Less than two years after BCBS takes over, the OGB reserve fund is depleted by one half.
- The administration fires two dozen more employees because of a lack of work and then enters into a $1.3 million contract with a California company to respond to questions from Louisiana residents.
- Kristy has to hire two executives from BCBS to help OGB CEO Susan West who apparently is not up to the task. One of those, who ostensibly serves under West, is paid a higher salary than West.
- Kristy Kreme Nichols attempts to mislead legislators and OGB members by repeatedly saying Obamacare is responsible for rising health costs and the depletion of the OGB reserve fund. No one buys her story.
- Kristy tells State Rep. John Bel Edwards that the OGB actuary, Buck Consultants, recommended a decrease in premiums but a single paragraph from the Buck Consultants report summary contradicts that claim.
- Two OGB executives have been sent to California to attempt to teach Ansafone employees how to respond to questions from Louisiana residents.
- Kristy Kreme ducks out on legislators near the end of the Sept. 25 hearing by the House Appropriations Committee to take her daughter to a One Direction concert in New Orleans where she and her daughter occupy Jindal’s suite at the Smoothie King Arena.
- A survey of employee job satisfaction conducted in 21 agencies in the Division of Administration reveals widespread dissatisfaction and distrust of the administration. Understandably, the survey has never been released and its contents were not divulged until LouisianaVoice recently obtained a copy.
And now, Jindal is offering foreign policy advice to President Obama with the release of a “policy paper” that calls for more defense spending. http://www.nola.com/politics/index.ssf/2014/10/bobby_jindal_takes_on_obama_fo.html
Louisiana Voice 
she suddenly “got an important phone call” and left the committee room.
So maybe it didn’t really qualify as an important call, but rather a persistent call. It could have been the daughter texting: “Mom! Mom! We gotta go!”
Also, I wonder if she has to pay anything for using “the guvnor’s” suite at the arena?
Tom, you deserve a “Nobel” prize for your exposure of the fraud, dishonesty, selfishness, greed, and obsession for power in this governor and his administration. I hope that all of this information gets distributed nationally.
I agree!
This is an extreme, overt abuse of power.
Those in office now that do not step forward and stop this must not be returned to office.
Call and contact your senator and state representative. Go see them.
Do it over and over and over.
Get your familly and friends to do it.
Ask them to specifically tell you what they are doing about this.
If you don’t get an answer, or a satisfactory answer, tell them you will never vote for them again and will ask everyone you know not to vote for them.
They are all up for reelection in one year.
[Thank you John Bel Edwards and Treasurer Kennedy for speaking out for us.]
[Where is your legislator on this? Mine, Eric Ponti continues to be silent. I will remember that.]
[Where is David Vitter and Jay Dardenne, the wantabes governor, on this? Haven’t heard a word from them! Don’t forget them either!]
I haven’t heated from Pontia or Claitor. The only person that has responded is Edwards too.
The single paragraph you have published from the Buck report should be reprinted on the front page of every daily newspaper in the state. It should be sent to every member of the legislature. It and other compelling evidence that this situation has not just been misrepresented, but actually and unequivocally lied about should be the basis for swearing Kristy Nichols and Paul Rainwater in any time either appears before a legislative committee. Doing this is not unprecedented and, though I can’t think of a case where people taking the truth oath before testifying being actually prosecuted for then giving false testimony, it has a chilling effect on lies and even on misrepresentations (white lies). It could also have a chilling effect on not just Ms. Nichols and Paul Rainwater, but on administration representatives and lobbyists of all stripes.
Why stop there? Why not charge everyone in the administration that was involved in this with a crime? This is evidence of a theft by conversion!
Isn’t that exactly what Caldwell is prosecuting Greenstein for? I believe the counts entail allegedly false confirmation testimony and false statements to the grand jury only four months prior to the indictments. This is just my opinion, but I think Caldwell’s case is pathetically weak and really more so a desperate attempt to impede success of the CNSI civil trial against the State of Louisiana. The Feds didn’t walk away from the core issues they were looking into for no reason. Again, just my opinion.
Did you read the post in the Business Report regarding the state’s case against Greenstein?
Yes, and I think it buttresses my argument. They aren’t even charging him with any impropriety in the awarding of the contract but instead hang their whole case almost exclusively on perjury before the grand jury literally months before the indictment. As Murphy Painter proved, getting indictments is a relatively easy task (all one-sided with no defense). The case is weak and unlikely to result in a conviction. If there was real meat there, the Feds never would have walked away, and the weak nature of Caldwell’s indictments proves it was an act of desperation not to conclude the impaneled grand jury with nothing. Personally, I don’t think Caldwell’s office would have even pursued it except to buttress their defense of Jindal’s knee jerk reaction of canceling the contract with no grounds (i.e. to bolster the defense on CNSI’s civil case). Greenstein will do like Painter and employ top-notch defense attorneys who will shred Caldwell’s crew to pieces, Greenstein will be acquitted, CNSI will win a large judgment against the State, and then, like Painter, we will be left paying Greenstein’s HUGE defense costs just like we did Painters. The Business Report is as pro-Jindal as you can get, so naturally they’re going to jump on Jindal’s bandwagon to throw Greenstein under the bus. No big surprise there.
John Bel Edwards and Kennedy are the only politicians that I have heard speaking out on this.
Is it possible to get a grand jury investigation into the overt abuse of power by this governor and false statements by members of the administration?
Where is the mainstream media ???
Nolan Nirvana – This happens all the time under the Jindal administration; Again, Tom has reported on Rep Broadwater, when director of the OWC, and many others blatantly crossing lines in awarding bids to companies whom then extend a “consulting agreement.” So Blatant, So Sad. Gone are the days when contracts are awarded on merit, rather than favor.
I’m sure it’s more to the reason given by the DOA for issuing a bid for actuarial services for OGB. I’m sure that they didn’t care for the fact that the Buck consultant had covered his $&@ in his report. Many of us at OGB knew that he did not agree to the premium reductions, let alone recommend them. I hope and pray that their lies and misrepresentations soon catch up with them. If so, it’s long overdue.
At the Appropriations meeting, one of the legislators (forgot his name) DID stand up with a stack of papers in his hand. He looked directly at Kristy Kreme and told her that he had contacted Buck and gotten copies of their reports. He told her that Buck Consulting told him that they had NEVER issued any such reports that suggested premium reductions in the amounts that had been enacted. He also told her that he had read through them and could not find anything in them recommending the premium reductions. Of course KK had no response to that.
The retirement spikes while still allowed are not as large as you indicate.
The spikes are limited by Act 75 of 2005 to 15%. It was previously 25%
Thanks. We appreciate the clarification.
Just seems like if we had any stomach, at the very least a couple thousand of us could show up to the Capitol with picket signs (if not torches and pitchforks). I mean this is a BFD, and the conduct of the Powers that Be only adds insult to injury. Sorry, but I’m starting to become a self-loathing stateworker and understand why so many see us as feeble, passive and inept.
Attended RSEA conference today where John Bel Edwards spoke about the OGB mess and how we could be powerful in numbers. He advised us to attend the next legislative committee meeting so that we could show the legislature that we really want to fight this. I agree with him. We cannot expect our legislature to fight this alone. Now it is up to us to back them up with our attendance at this meeting. While the Jindal administration is getting their ducks in a row by extending the enrollment period, changes have already been made. An OGB rep. informed me today that if we do nothing about our insurance, OGB will put us in the plan most comparable to the existing plan we currently have. When John Bel Edwards spoke, he referred to the conversation he had with his mother (who is also a retired state employee) about being sure to fill out her choice of insurance plan on the enrollment form and mailing it before deadline to OGB. I do not trust that OGB will move me into a comparable plan as we were told today. I plan to fill out the enrollment form and mail it by certified mail to OGB. This business of first you don’t, and then you do, just adds on to the confusion already set in place. By the way, I will cast my vote for John Bel Edwards. Will you????????
Carmen Villemarette – Did he give any indications of when the next legislative committee meeting will be held?
This administration has lied very often, but this one is more outrageous than ever. I used to think it was incompetence—or just a motor mouthing governor, but now I think it is far, far worse. I agree with Steve Winham. Where are the mainstream media? Oh, how I wish I still worked for one – I’d get this on the front pages. In my book, this woman should be removed from state government.
It seems to me that everyone on this so called blog is very negative and thinks that you should get some free stuff just because you are state employees. You are very fortunate to have the opportunity of choice, as most in the private sector only have one choice for their insurance. You have six.
Quit cutting people down, act like adults and quit calling people names. You come across as such petty little children when you bring your argument down to mane calling.
Sir, this is not “free stuff” we’re talking about here. These are benefits that were promised to these people when they went to work for the state at considerably less money than they would received in the private sector. The trade-off was lower salaries (no social security) for benefits and retirement.
Two years ago, Jindal tried to jerk the retirement benefits from under the state employees. One I know, for example, would have seen her retirement go from $39,000 per year to $6,000 per year under his “reform.” And there is no social security for state employees. Ask yourself if you would care to attempt to survive on $6,000 per year and then get back with us.
Thank you very much for your reply, Tom! I am SOOO sick of private sector employees comparing our “benefits” to theirs. They cannot seem to grasp the fact that: 1) State employees work for less pay in order to earn those benefits; 2) we ARE paying for a portiojn of those benefits; and, last but not least, 3) we ARE TAX PAYERS, TOO!!!!!
Too important a topic to be distracted by the juvenile name calling. Kreme Kreme Kreme, yeah we get it, it’s clever. But it belittles serious discussion.
It’s free to you if I have to pay for it…
I notice Mr. Aswell you didn’t address the name calling in your response, is that something that brings you journalistic credibility? So your plan is to continue it, as Greg Granger made a great point and you didn’t address his response either?
My company pays 60% of my benefits and I pay 40%, will you be willing to pony up some money for me as I originally took my job for less money for better benefits in order to do what I want to do! Costs have gone up so the employees have been asked to pay more for their benefits, sound familiar?
Besides, what is your interest in all of this, are you a retired state employee, why do you have an axe to grind with all of this? How about a positive article sometime. I notice when you list all of the contributions to politicians you never mention any of the good things these companies have developed over the years. Only the lawsuits and fines. If it weren’t for the private sector you might be paying 100% for your benefits.