The Nevada Faculty Alliance (NFA) issued a statement to the legislature’s Interim Retirement and Benefits Committee (meeting on January 27) warning that the Public Employees’ Benefits Program (PEBP) is facing a serious financial crisis.

Fiscal Shortfall

PEBP mandatory reserve levels are deficient by tens of millions of dollars. Even more alarming, actuaries project PEBP could become insolvent and unable to pay all claims by FY2028 without additional revenue or benefit cuts. NFA’s statement analyzes the reasons for the shortfalls and how they developed.

Premium Hikes and Benefit Cuts are Likely

Restoring reserves in the next year would require an unreasonable 84% increase in employee premiums, according to the actuary. The PEBP Board will meet on February 18 to consider options including premium increases and benefit cuts.

What Must Happen

NFA urges state and PEBP leaders to:

• Restore reserves gradually over three or four years. The State must share the burden, and not rely entirely on employee premium increases or benefit cuts.
• Protect employees from added financial strain, especially after increases to outofpocket maximums already approved for FY2027, from $4000/$8000 (single/family) to $5000/$10000 for the high-deductible and low-deductible plan options
• Investigate the causes of both expense overruns and revenue gaps, and review reserve standards to ensure longterm stability. PEBP must be held accountable with full transparency in its budgeting and rate setting.
• Commit to a comprehensive funding solution during the 2027 legislative session.

Without appropriate action, PEBP could face the inability to pay medical claims within a few years—impacting tens of thousands of Nevada public workers, retirees, and families. The NFA stresses that the solution cannot rely solely on employee premium hikes or cuts to employee benefits.