State Workers

Agencies don't need merger, says director

The state Department of Retirement Systems and the Health Care Authority don’t need to merge, said Steve Hill, who has been the director of both agencies for four months.

Cooperation and having the same boss are enough to get the agencies to work together, Hill said.

Hill says he will not push for a new law that would officially merge the agencies, as had been planned.

“I actually think we can get more progress without a merger,” said Hill, who has headed the Health Care Authority since 2005.

The authority oversees the health insurance plans of public employees; Retirement Systems oversees public pension benefits.

At the beginning of the year, Gov. Chris Gregoire said their similar customer base was a good reason to combine the agencies, which together have about 550 employees.

A merger might save $2 million, Hill said, but the agency is also grappling with a $238 million cut to the Basic Health Plan, a program the authority runs that is not aimed at public workers.

Hill said he told Gregoire this month that a merger would alarm some retiree groups, result in minimal savings, and distract from more pressing issues.

“I told her I don’t think the HCA has the capacity to do this,” he said. “There certainly will not be any excitement for a merger, more likely opposition.”

State retiree groups may like the decision, but others think it casts doubt on state government’s ability to change, even in a deep recession.

State Rep. Gary Alexander, the lead Republican on the House budget committee, said the merger may not have been necessary for customer service improvement. But he added that many of the majority Democrats’ other reform plans failed to materialize too.

“I just didn’t see a lot of restructuring that took place over the last session,” Alexander said. “I thought it was an opportune time to look at restructuring, reprioritization, streamlining operations, and … I didn’t see a whole lot of effort.”

Retired public employees likely will see the decision as a good thing, said Jeffrey Jaksich, an active member of the local retirees council of the Washington Federation of State Employees.

But he disagreed with Hill’s stated reasons for pulling back, saying the merger was clearly impractical.

“He assessed it correctly, politically,” Jaksich said. “The only way you can merge those two is you have to change the laws, and that wasn’t going to happen. Remember the legislators are on the same health care and pension system” as state workers.

Public employees, both retired and active, are concerned with the underfunding of the pension system, which will become worse under the budget passed this year, he said. And they are concerned about the insurance plans overseen by the Health Care Authority, which will double some co-payments and other fees next year.

Hill said the level of support for Retirement Systems was a pleasant surprise, and influenced his decision.

“It’s the old saying, if it ain’t broke, don’t fix it,” Hill said.

He pointed to several areas where he thought the two agencies, which he will continue to oversee, can improve their cooperation:

 • Sharing customer information so customers don’t have to update their name, address or phone number twice.

 • Sharing information about each agency’s services, so customers can be counseled about retirement and health care choices at either agency.

 • Sharing death notices, so customers of both services do not need to contact each agency when a family member dies.

 • Consolidating some functions, such as a single tribal liaison for both departments, and sharing graphic design units.