Public Employees' Benefits Program reports exhausted excess reserves, proposes HSA/HRA increases pending budget

Celestina Glover, executive officer of the Public Employees' Benefits Program (PEBP), told the Assembly Committee on Government Affairs that PEBP administers medical, pharmacy, vision and dental benefits for state and participating non-state members and that the program's finances and reserves were strained in recent years.

"Our mission is to provide employees, retirees, and their families with access to high quality benefits at an affordable price," Glover said during the committee presentation. She said PEBP is governed by NRS 287 and overseen by an 11-member governor-appointed board.

Glover provided enrollment snapshots and budget figures. She said the program covered approximately 72,600 people as of January 2025 (about 46,000 primary members plus roughly 26,600 dependents, as presented), then supplied a more detailed breakdown for Jan. 1, 2025: 28,397 active state employees, 3,523 pre-Medicare retirees and 8,985 Medicare retirees in the state blocks; smaller non-state groups were listed separately. Glover said PEBP's budget for the upcoming biennium is approximately $1,400,000,000 and that PEBP is funded by employer contributions and member premiums; it receives no direct allocation from the State General Fund.

Glover described PEBP's reserve categories and said the program no longer has excess cash reserves. "Currently, PEPB does not have any excess reserves. Those were essentially exhausted in 2023," she said, attributing the drawdown to rising pharmacy and medical costs and prior plan changes.

She described PEBP as a primarily self-funded program that uses a third-party administrator (TPA) to adjudicate and pay claims; Glover said the TPA is UMR and that UMR has served as the TPA since 2020. Staffing was discussed: PEBP has 34 FTEs authorized, and Glover said 30 positions were filled at the time of the presentation.

On plan design, Glover told the committee the agency and its consultants evaluate benefits and pricing and then make recommendations to the PEBP board. She said the board in September approved a proposed increase to HSA/HRA contributions for the high-deductible plan that would raise the state active employee base contribution to $700 and $200 per dependent up to three dependents; she framed that approval as contingent on the Legislature's final budget. Glover also said plan year starts July 1, open enrollment is in May, and PEBP aims to stabilize plan design for more than two years when feasible.

Public commenters backed maintaining retiree health protections and modest increases to HRA support. Terry Laird, executive director of Retired Public Employees of Nevada, said the organization supports PERS and PEBP and urged modest HRA increases and protection of retiree health benefits. Kent Irvin of the Nevada Faculty Alliance said he was "happy that PEBP is not proposing any plan design changes" and urged restoration of pandemic-era cuts to retiree health benefits for employees hired after 2011.

Glover concluded by reminding the committee that PEBP sets rates in March for the upcoming plan year and that any changes depend on the governor's recommended budget and final legislative appropriations.