Judge Says Suit Against Louisiana’s Office of Group Benefits Can Advance

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A Baton Rouge state judge has ruled that a lawsuit that claims the Jindal administration mismanaged the state health insurance program and illegally implemented changes to it can move forward.

Six retired state employees allege the state Office of Group Benefits — which provides coverage to some 230,000 state workers, teachers, retirees and their dependents — failed to follow approval procedures required in Louisiana law that call for prior notice and public comment.

The Advocate reports Winston DeCuir Sr., one of the state’s attorneys, argued before District Judge Janice Clark that a public hearing was held but was poorly attended.

That’s because the hearing was a “sham,” countered J. Arthur Smith III, who represents the retired workers who filed suit in April 2015.

“Everything was already done. (The hearing) was like window dressing,” Smith told the judge.

Michael Adams, who also represents the state, indicated the state 1st Circuit Court of Appeal will be asked to review and reverse Clark’s ruling.

The suit, which seeks monetary damages, accuses the Office of Group Benefits of poor financial management.

Group Benefits encountered financial problems after the Jindal administration reduced insurance premiums by more than 9 percent. State government and school boards pay 75 percent of the premium, so a reduction freed up dollars that could go to other budget requirements.

But the premium reduction and rising health care costs ended up eating into a once healthy $500 million-plus Group Benefits reserve account. It was down to less than half of that within two years and continued to decline, threatening the financial health of the program.

The administration then revamped the program, resulting in higher premiums, deductibles, co-pays and out-of-pocket expenses to try to stabilize the situation.

Former Commissioner of Administration Kristy Nichols has said the administration acted properly to deal with rising health care costs.