Nebraska To End Practice Of Offering Different Health Insurance Options To State Employees Based On ZIP Codes

Main Category: Health Insurance / Medical Insurance
Article Date: 14 Aug 2008 - 11:00 PDT

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The Nebraska government by Jan.1, 2009, will end the practice of offering state employees different health insurance plans based on the ZIP codes in which workers live, the AP/Sioux City Journal reports (AP/ Sioux City Journal, 8/10). A lawsuit was filed last year in the Lancaster County, Neb., District Court alleging that state employees living in predominantly black ZIP codes were offered inferior health insurance coverage. The lawsuit was filed on behalf of Sandra Cartwright, who works for the state Health and Human Services System in Omaha.

The state changed its health insurance packages in 2007 by restricting employees' options based on where they lived. Employees living in one of three ZIP codes in Lincoln and Omaha, where 96% of the state's black employees reside, had a choice of two Mutual of Omaha plans and two Blue Cross Blue Shield of Nebraska plans. Both sets of options offered employees inferior coverage, according to the lawsuit. Employees living outside of the three ZIP codes had the option of a "significantly better health insurance plan" from BCBS that offered more extensive coverage, more in-network doctors and access to certain national facilities. The Nebraska Association of Public Employees filed a grievance when the changes were made, but the grievance did not result in any changes to the plans (Kaiser Health Disparities Report, 11/5/07).

In July, Lancaster District Court Judge Paul Merritt dismissed the lawsuit and ruled that Gov. Dave Heineman (R) and other individual state officials named in the lawsuit have sovereign immunity against the allegations.

Meanwhile, the state decided to change its insurance package plan by making BCBS the sole health insurance provider for the state beginning Jan. 1, "essentially stopping the use of ZIP codes," the AP/Journal reports. Roger Wilson, interim state health benefits administrator, said the change was a matter of cost savings and was not caused by the pending lawsuit alleging discrimination.

Lincoln attorney Kathleen Neary said, "Of course they're not going to admit our lawsuit played a role, but of course it motivated the change," adding that the new agreement with BCBS will ensure that "our client and other African-American state employees will be treated the same." An amendment to the lawsuit filed on Wednesday contains the same discrimination allegation, but adds that state officials should not be immune to the lawsuit because they knew or should have known that the policy was discriminatory. A spokesperson for State Attorney General Jon Brunin (R) said the office will again ask the court to dismiss the case based on sovereign immunity. Neary said the plaintiffs have not decided whether to follow through on the lawsuit now that the practice will end (AP/Sioux City Journal, 8/10).

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