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State: Employees Paying Premiums Are Covered

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Despite a recent dispute between the state and an insurance company that offers employee benefits, General Services Secretary Ed Burckle vows that all employees who have been paying premiums for supplemental death and disability benefits will be covered.

At the same time, he acknowledged in an interview with the Journal that the mix-up occurred because the state allowed certain people to sign up for the coverage without providing a medical certificate – the contract with the insurance company requires such “evidence of insurability” for people who choose the coverage more than 30 days after beginning to work for the state.

He attributed the mistakes, which started when the insurance contract shifted to Standard Insurance Co. in July 2007, to improper training of human resource officers in some state departments.

“Clearly, there were some training issues involving a few human resources representatives,” he said.

The error came to light in recent months after the deaths of two workers for the Energy, Minerals and Natural Resources Department. Without the medical certificate on file, Standard declined to pay their supplemental benefits and returned the cost of the premiums to the survivors.

Burckle said the state paid the supplemental benefits, which totaled about $55,000, to the families. He said last week those were the only two situations of that type he was aware of.

While 9,147 state employees are paying premiums for the benefits, Burckle said last week he didn’t know how many fell in the category of not having the required information on file after signing up past the initial period.

Also, noting that city and county governments, as well as some school districts, also get coverage under this umbrella insurance contract, Burckle said he has no idea how many of those workers might be affected.

The General Services Department Cabinet secretary said state officials are negotiating with Standard Insurance Co. to resolve the issue. While Burckle admitted the state made some mistakes in signing people up for coverage, he also blamed the insurance company for accepting premiums from these workers without also having information on hand showing they were eligible for the coverage.

The insurance company has issued a statement that “the State and Standard are working collaboratively to resolve a limited administration issue … and our mutual interests are in ensuring that employees desiring such coverage are properly enrolled into the benefits program.”

A class-action lawsuit has been filed on behalf of state employees in district court against both General Services and Standard Insurance over this matter.

“Once we reach an agreement with Standard, we want to be sure Standard knows who is covered or not when the premium moves forward,” Burckle said. “We continue to talk with Standard on a regular basis. My hope is to have this resolved soon.”
— This article appeared on page C2 of the Albuquerque Journal

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