Lawmakers approve PEBB plan design, reserve funding and trend adjustments; PEB staff confirm Carson Tahoe access through Dec. 31, 2025; disclosure made by law‑m

The joint Senate Finance and Assembly Ways and Means Committee approved the Public Employees Benefits Program (PEBP) funding and plan design recommended in the executive budget, including decisions on benefit levels, trend funding and actuarially determined reserves.

Alex Hartz of the Fiscal Analysis Division presented the plan design materials and supporting decision units. The committee approved funding for benefit levels shown in the plan design attachment, including decision units that restore state-paid life insurance for active employees and retirees to pre-pandemic levels and address the state contribution for dual enrollees with Medicare, as recommended in the executive budget.

On prescription, medical and dental trend, fiscal staff presented actuary estimates of prior-year trends and projected plan-year trends (for plan year 2025: medical 6.8%, pharmacy 15.05% before rebates, dental 2.4%; pharmacy trend reduced to 13.9% when rebates are applied). The committee approved funding to fully fund projected medical, pharmacy and dental trend as recommended by the governor.

Regarding reserves, the committee approved net revenues totaling $57.7 million over the 2025–27 biennium to fund actuarially recommended reserves and approved draft authorizing language for the 2025 Appropriations Act that would require PEBB to notify and seek Interim Finance Committee approval before using plan reserves to change health benefits or for any other use of plan funds (including reducing or offsetting participant premiums). Fiscal staff proposed clarifying wording to ensure the requirement applies to any plan reserves and any use of the funds.

Carson Tahoe access and member communications: Assemblymember O’Neil asked PEB staff to confirm the status of Carson Tahoe Health Network access for PEB members. Celestina Glover of PEB said Carson Tahoe agreed to extend its contract through Dec. 31, 2025. ‘‘Based upon CTH's, Carson Tahoe Health's, willingness to extend the current contract, PEB members will be able to access CTH at least until the end of the year,’’ Glover said. Glover said PEB is preparing a communication plan including email notifications, website notices, member-service messages, newsletter items and mailing (to the extent budget allows) targeted to retirees who may not use email.

On the Medicare retiree health-reimbursement-arrangement (HRA) contribution, public testimony and committee discussion reiterated interest in increasing the HRA ($13 per year of service was the currently discussed figure for Medicare retirees). Fiscal staff provided a back-of-envelope estimate that each additional dollar of HRA cost would be approximately $3 million per year; staff and the committee noted timing limits for open enrollment and suggested implementation of any change would likely occur for the next plan year (2027) rather than immediately.

Assemblymember Monroe Moreno disclosed she serves on the board of directors of Carson Tahoe Health Systems and, after consulting legislative counsel, said she would participate and vote on the budget because she determined the budget decisions did not affect her differently than other hospital officers or employees. The committee accepted the disclosure on the record.

The committee approved all three major PEBB decision packages (plan design, trend funding, reserves and authorizing language) and closed seven other items; motions passed on voice votes with no recorded roll-call tallies in the transcript.

Context: PEBB provides health and related benefits for state employees and retirees. The committee’s approvals secure short-term provider access for PEB members through an extended Carson Tahoe contract and set reserve and trend funding for the upcoming biennium. Discussions flagged potential follow-up on communications to retirees and possible future HRA changes.