It was only last Nov. 20 that a joint meeting of the House Committee on Appropriations and the Senate Committee on Finance was told that the Office of Group Benefits (OGB) was in improved financial condition.
By April 21 of this year, however, serious discussion had begun about a premium increase for state employees and retirees even as state workers have been told they will not get merit pay raises for the sixth straight year.
OGB Executive Director testified before the joint committee last November that the agency’s fund balance, nearly depleted by the reckless fiscal policies of Bobby Jindal, had recovered to $122 million at the end of the 2015 fiscal year (June 30, 2015) and was projected to be $146 million by the end of the current fiscal year. http://house.louisiana.gov/H_Video/VideoArchivePlayer.aspx?v=house/2015/Nov/1120_15_AP_SenFinance
Neither amount, of course, is anywhere close to the $500 million fund balance accrued by former OGB Executive Director Tommy Teague before he was teagued in April 2011. (for those who may have forgotten, the term coined by a reader for those who dared disagree with Jindal who were quickly fired or demoted).
It is, however, a significant increase from the low balance that came perilously close to double digits in 2014.
Jim Fannin (R-Jonesboro), at the time a member of the House and chairman of the House Appropriations Committee though he had already been elected to the Senate, asked West what the OGB “burn rate” (the amount paid out monthly in benefits in excess of premiums) was.
“It was $16.3 million,” West replied. “It’s now $7 million. Changes that were made have had a positive impact on the fund balance.”
She said OGB has held no public hearings “because there are no planned benefit changes for 2016.”
But wait. Her testimony does not quite jibe with the April presentation of OGB consulting actuary Arthur J. Gallagher & Co. in that OGB ESTIMATING CONFERENCE
At that estimating conference, Gallagher said a 7 percent rate increase would increase the fund balance to $156.9 million by the end of fiscal year 2017 (June 30, 2017), which it said was “within the target range” of $130 million to $240 million.
Gallagher recommended that the new rate increase go into effect in January 2017 “for ease of communication and administration due to annual enrollment timing.”
Gov. John Bel Edwards, then a state representative, openly opposed the 2014 OGB rate increase plan proposed by West and then Commissioner of Administration Kristy Nichols.
Edwards even went so far as to request an attorney general’s opinion on the method by which Nichols and West were attempting to implement the new premium increase and when the Jindal administration learned in advance that the AG’s opinion would be detrimental to its premium increase plan, Nichols quickly shifted gears in saying that the state would go through the required rule-making process spelled out in the Administrative Procedure Act (APA).
That move only served to further invoke Edwards’ ire because, he said, the changes had already been implemented without the required public hearing. https://louisianavoice.com/2014/09/23/smackdown-attorney-general-opinion-on-ogb-proposals-hands-jindal-administration-another-stinging-legal-setback/
Now Edwards finds himself in the ticklish position of having to either uphold his original position of opposing a rate increase, which originally brought him to the attention of state employees as their White Knight, or backing his OGB Executive Director.
As our late friend C.B. Forgotston was so fond of saying: You can’t make this stuff up.