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August 1, 2003
Oil & Gas Conservation Commission Building
Casper, Wyoming
Senator Cale Case, Chairman;
Senator John Schiffer;
Representative Phil Nicholas.
John Rivera, Senior Staff Attorney.
Please refer to Appendix 1 to review the Committee Sign-in Sheet for a list of other individuals who attended the meeting.
Senators Irene Devin and Mike Massie;
Representatives Elaine Harvey and Larry Meuli.
All meeting materials and handouts provided to the Subcommittee by the Legislative Service Office (LSO), public officials, lobbyists, and the public are referenced in the Meeting Materials Index, attached to the minutes. These materials are on file at the LSO and are part of the official record of the meeting.
Chairman Case called the meeting to order at 8:45 a.m.. The following sections summarize the Subcommittee proceedings by topic. Please refer to Appendix 2 to review the Subcommittee Meeting Agenda.
Chairman Case advised that Representative Meuli would also serve on the Retirement Subcommittee because of his interest in the subject.
Mr. Tom Mann, Director, Wyoming Retirement System, distributed Appendix 3, explaining that the document was a response to a question from Senator Schiffer, Chairman of the Retirement Subcommittee. The survey of surrounding states finds that states with plans somewhat similar to Wyoming's include North Dakota and Utah. Other states require some employees contributions. Although Wyoming statutorily requires an employee contribution, the legislature appropriated funds to allow the state employers to pay the employee's portion of the contribution in 1980, which policy has continued to the present. This policy has allowed a benefit to the employee without increasing federal income, social security and Medicare taxes.
Mr. Mann explained that there are two types of retirement plans that are widely used, including a defined contribution plan and a defined benefit plan. The former specifies the contribution rate, but the retirement benefit is based on the success of the investments of those contributions. The latter specifies what the benefit will be based on predetermined formula, without regard of the investment success of the retirement contributions. Representative Nicholas stated the latter is also what attracts employees because the risk is retained by the employer.
In response to information provided, Representative Nicholas suggested the Joint Subcommittee may want to consider the employees' required contribution of 5.57% which the state contributes on behalf of employees and which the employee may withdraw upon separation. Chairman Case stated that the four year vesting period for retirement benefits may also be generous. Mr. Mann advised that some states require up to ten years of employment for retirement benefits to vest, but five years is most typical.
Buck Consultants
Mr. Christopher Hulla and Ms. Liz Ramirez, Buck Consultants, Inc. (Buck), presented various appendices describing the data Buck had obtained. The appendices include:
Mr. Hulla stated most employees want choices that are not just limited to deductibles. Defined contribution plans haven't caught on because of employees' fears that the contributions may be not be managed well enough to ensure an adequate benefit. Such plans do benefit the employer because of the fixed costs. As expected, a smaller number of people are generating a higher percentage of costs to the program. A consumer-driven health care program might only affect ten percent of program costs.
Senator Schiffer requested a list of the preferred providers in the Wyoming network, broken down by city or county, if possible. Mr. Ralph Hayes, Wyoming Employees' and Officials' Group Insurance Program (Group Insurance), stated he should be able to provide the list of preferred providers.
Mr. Hayes also advised that he may be the most appropriate person to respond to the survey (Appendix 5) to which Buck asked Subcommittee members to respond. He stated that Group Insurance already has, and is using, many of the tools described in Appendix 6.
Mr. Hulla stated the final report will describe how measures should be structured to see if they are effective. The consumer-driven health care plan can have the best effect on prescription drug costs. Buck will refine its projections and the assumptions upon which the projections will be based.
Ms. Ramirez asked how the report should be structured. Buck would like a list of private employers with how the state competes to perform a survey of pay to benefit ratios. Mr. Brian Foster, Administrator, Human Resources Division of the Department of Administration and Information, stated he may be able to provide this information if it is available on the Central States Survey. Ms. Ramirez stated that while health, retirement, sick leave and vacation leave time are the primary components of the study, there are other issues that will have to be presented in the report also.
Chairman Case and Mr. Foster described legislation considered last interim with respect to conversion of accumulated sick leave upon separation from state employment. Mr. Hulla indicated that Buck will need to consider how to align excess sick leave as an incentive program, by looking at what other employers are doing in this area.
Chairman Case asked if Buck was getting all the information it needs to complete its study. Mr. Hulla replied that Buck's attorneys and the Wyoming Attorney General's Office can't agree to some terms in the Attorney General's standard business associate agreement because the standard contract imposes more liabilities than Buck is willing to accept. The Buck attorneys will have to communicate what their concerns are with more specificity.
Subcommittee Discussion
Chairman Case advised the Joint Subcommittee may have to meet as many as three more times to receive a preliminary draft report, a final report and, after all necessary changes have been made, to approve the report for submission as required by the enabling legislation. He proposed requesting sufficient funding from Management Council for those meeting so the Joint Appropriations Interim Committee and Joint Labor, Health and Social Services Interim Committee wouldn't be shorted any funding those committees may need for their other interim work.
It may also be necessary to check with the Governor's Office to find out what is happening with the project being performed by Dr. Harold Gardner. Representative Nicholas indicated he could check with Ms. Alfrieda Gonzales about the status of that project.
Senator Scott asked to have the ramifications of the bidding occurring in Laramie County with respect to the healthcare maintenance organization (HMO) explained to the Joint Subcommittee. Representative Nicholas advised that if the HMO were to receive a contract to be the administrator of the group insurance plan, it might negatively affect the availability of health care providers for state employees.
Chairman Case stated a meeting in September will be planned to receive the preliminary draft report from Buck.
There being no further business, Chairman Case adjourned the meeting at 4:00 p.m.
Respectfully submitted,
Senator Cale Case, Chairman