Nevada officials admitted Tuesday they have incomplete information on the financial situation of the state worker health insurance program that covers more than 70,000 people, even though new plans with likely premium increases are set to be finalized next month.

Originally, the board of the state’s Public Employees’ Benefits Program (PEBP) was set to meet Tuesday to hear proposed changes to insurance plans, including potential increases to premiums and out-of-pocket maximums. In recent weeks however, questions arose about how much money is actually in the program’s coffers, stopping any discussion on proposed changes.

Instead, board members asked a third-party group that proposed the changes, Segal, to use program data from 2024 and 2025, in addition to inflation trends for the following two years, to craft its next proposals. These proposals will be heard in a March meeting, which is when the state is supposed to finalize health insurance plan terms starting in July.

During Tuesday’s meeting, state workers warned that premium increases could lead to a “mass exodus” of employees, and they called for an independent audit of the program’s finances.

“Single-income households literally cannot afford for [premiums] to go up,” state worker Andrea Hernandez told the board. “It will force us to choose between taking care of our children’s health or staying employed or being forced to leave the state.”

Because of the money mishap, it’s unclear how much premiums might increase. State officials previously told The Indy that they are open to larger changes to how the state’s health insurance system works, and they are bringing in outside experts to research other potential plans.

“We understand that any increase in premiums is difficult for our members, and we hear the concerns voiced by employees and retirees regarding affordability, ” PEBP Executive Officer Theresa Carsten said in a statement released Tuesday. “Some adjustments are necessary however to secure the financial health of the program.”

The Nevada Independent reported last month that some workers’ health insurance premiums were likely to increase because of myriad factors, including rising health care and insurance costs and the program’s overall dire financial situation.

But the situation since then has worsened.

Segal has learned that it received incorrect information on how much money the state would be pouring into the program — $56 million lower than anticipated for the ongoing budget cycle.

The correct amounts were part of Gov. Joe Lombardo’s executive budget, despite comments at Tuesday’s meeting that one potential reason for the mistake is that the numbers changed across the course of the 2025 legislative session.

Richard Ward, a senior vice president at Segal, said Tuesday that “a lack of communication is the best way to characterize” how the error happened.

Ward also acknowledged that in recent weeks, his group has gained “a much improved understanding of how the revenue flows within” the program.

“That was not something we were really read into prior,” he said.

Through an ongoing review of the program’s budget, state officials also learned that the program has more assets that it had not accounted for, Carsten said at Tuesday’s meeting. This means that the program’s reserve dollars — already known to be decreasing — will be even less than projected.

These realities have exacerbated a precarious financial picture. In January, the program reported that across the first five months of the fiscal year, it was $16.5 million underwater.

Because of the unclear financial situation, the board voted against one member’s proposal to lower out-of-pocket maximums for insurance plans that state workers are deserting en masse because it has a higher deductible. The board previously increased these maximums in December, but the proposal Tuesday was to revert them back to existing levels.

“I’m not comfortable addressing more plan design changes until we have a better idea of ratings and how much money we actually have,” board Chair Jim Wells said.

The open enrollment period for state workers to choose a health insurance plan lasts through all of May. 

Laura Rich, a PEBP board member and head of the Nevada Department of Human Services, suggested narrowing this period to 15 days so that the state has more time to finalize and test plan changes. This proposal is expected to be considered at the board’s next meeting. 

“Given the circumstances, we need to take our time,” Rich said.