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.
Louisiana Voice 
As several classes of employees have not received salary increases in five years, the proposed increase will only serve to add further insult.
When in the hell is Jindal going to pay for all the wrong he has done to us? Can’t someone do something to this joker? No one else would have gotten away with this!
Looks like 7% will just be the start! The Gallagher link projects a potential near $100 million “Cadillac Tax” in FY ’20.
Combine that with the increased pension fund contributions taxpayers will have to make to pay for artificially-inflated salaries like Jindal created for people like Troy Hebert and JBE is doing for Dardenne, Melancon, Edmonson, and others, and taxes can’t even be raised enough to cover all this without devastating impacts on businesses’ hiring and jobs and people leaving for states much more friendly to retirees like Texas and Florida.
People may not like it and may scream to the top of their lungs, but middle-class welfare programs like TOPS simply aren’t sustainable, and the sooner people are weaned off of those type programs (which have facilitated the hiring of a massive number of administrative people at six-figure salaries at LSU), the better!!
The time for Louisiana to “pay the piper” is fast approaching, and raising taxes year in and year out is NOT going to be the solution and, in fact, is only going to make the fiscal problems worse each year.
“…taxes can’t even be raised enough to cover all this without devastating impacts on businesses’ hiring…” Business taxes were cut over 70% by jindal and his lackeys in the legislature. Just like every other state and country that has tried that, the rich got richer and there was minimal hiring/expansion by business. Business tax cuts are the primary reason Louisiana is in gigantic fiscal hole and that is where the JBE and the legislature should look to restore historic revenue levels. Rolling back business taxes to pre-jindal levels shouldn’t drive any business away. They weren’t leaving the state then, why would you think they would leave now?
Well said!
For the same reason GE abandoned Connecticut for Massachusetts. Further, if the special session results in the passage of anything resembling HB-31 or HB-41 from the last special session, I’m leaving for Montgomery County, Texas. I had already honed in on apartment complexes there when those measures were under consideration during the last special session.
Jay Dardenne always likes to be quoted as saying, “Economists tell us……” Well, one of the things they tell us is consumers change their behavior when the price of anything rises. That’s true of the “price” imposed merely for residing in Louisiana and having income (i. e. taxes). Many simply change the state in which they reside (i.e. Move to Texas) as I’m going to do if they remove my ability to deduct Federal income taxes from my state return. Of course, Dardenne doesn’t have to worry about that when he gets his $200,000/year pension, does he? Nah, since EVERY DIME is EXEMPT from paying state income taxes. Never hear a proposal to cap THAT exemption at something like $30,000/year, do we?
Once I’m gone (and others like me) they can just plan more tax increases next year to offset the lost revenue (income taxes, sales taxes, all of it).
Go ask Connecticut’s Governor how well all those back-to-back years of tax increases have worked for his state. It just made the eventual day of reckoning that much worse: http://www.courant.com/politics/hc-malloy-revised-budget-0413-20160412-story.html.
It’s all too confusing! Insurance rates up? No insurance increases? It seems everyone is putting a spin on the information we see. Who is the one person we can believe? The one who is not trying to protect someone (or themselves).
We are real people with real lives and budgets of our own. Who is there to help the individual, the real person who is being affected?
The OGB Reserve fund was drained by reducing premiums when it should have been increased to match raising medical costs. This reduced the state’s premium contribution and the difference was made up from the Reserve. jindal and Nicholls changed OGB benefits by doubling co-pays and adding crippling deductibles. I would have much rather paid for a increase in premium to the levels required by the increases in medical costs than the much larger increase in out-of-pocket costs they implemented. There is a law suit by state workers, teachers and retirees because we did not really have a chance to comment on the jindal/Nicholls changes until after enrollment was complete.
Meanwhile, Kristy Nichols, Jindal’s Head of DOA, who is most responsible for destroying state employees’ health insurance, gets a 6 -figure job as a lobbyist for OCHSNER! Shame on OCHSNER!
After a year of continuances, the lawsuit against OGB and the Office of the Governor (Bobby Jindal), filed in April, 2015 by a group of state employees and retirees due to changes in OGB plans and premiums outside the rules of the Administrative Procedures Act, is back on the docket for a hearing on June 13, at 1 p.m. in Judge Janice Clark’s court, 19th JDC, 300 North Blvd., BR. The group that brought the suit is LA Verite’ 2015, and together with our attorney, J. Arthur Smith III, is working to fight for the rights of state employees and retirees. Anyone may attend the hearing.
:LA Verite’ 2015 may be reached at La.Verite2015@outlook.com or send a note to LA Verite’, 23527 Elberta Lane, Zachary, LA 70791.
Gov. Edwards, as a state representative, was aware of the lawsuit and supported our efforts. We cannot understand why there have been no changes in the administration of OGB.
Because Edwards is a puppet whose strings are pulled by those appointees to whom he is totally beholden for his election in the first place. Edmonson and Browning are the most glaring examples but are by no means the end of the roll call for that class.
OGB is giving discounts on monthly premiums to state employees who give a third party access to their annual health checkup records. However, they need rate increases – why? Also, BCBS is giving out major bonuses and raises to their employees on the backs of state employees!!!
The insurance already cost us vastly more… huge deductibles now, copays doubled, things are not covered anymore.. procedures that once cost $100 now cost $1200, prescriptions once covered now are not…. they need to make huge changes to our insurance but it sure is not in a cost increase. Ridiculous.