Louisiana Group Benefits Chief Resigns
The chief executive officer of the health insurance office for state employees and retirees, hired by the Jindal administration in April, is resigning after receiving strong criticism from lawmakers about his work to help privatize office operations.
Scott Kipper’s resignation as head of the Office of Group Benefits comes as Gov. Bobby Jindal faces complaints for his proposal to hire an outside contractor to run one of the office’s state worker health insurance programs. Kipper’s decision also follows a stormy confirmation hearing last week during which senators accused him of withholding information about the privatization effort.
Kipper will resign June 24, the day after the regular legislative session ends. The move means a confirmation vote will no longer be expected in the state Senate. Kipper told the administration last week of his resignation plans, said Michael DiResto, spokesman for the governor’s Division of Administration.
“He was not asked or encouraged to do so — in fact, he was encouraged to reconsider,” DiResto said in an e-mail. “Mr. Kipper has had a long and distinguished career in insurance, but he expressed his conclusion that he did not believe the appointment was a good fit for him, and so his resignation has been accepted.”
DiResto said Kipper hasn’t submitted a formal resignation letter yet. DiResto didn’t immediately respond to questions about whether Kipper cited the privatization complaints or his confirmation hearing when he announced his plans to quit the position.
The Office of Group Benefits provides health insurance and life insurance to more than 148,000 current state workers and retirees and more than 107,000 of their dependents.
Kipper took the job in April, after the Jindal administration fired the former CEO of the group benefits office, who then publicly criticized the governor’s privatization proposal.
Messages left with a spokeswoman at Kipper’s office and a spokesman at the Division of Administration weren’t immediately returned.
The Division of Administration is seeking a financial adviser to help it determine the health insurance program’s worth and the structure of a sale. Some of group benefits’ insurance plans already are run by private companies. Jindal’s proposal would affect about 62,000 employees, retirees and their dependents.
Jindal has said Louisiana shouldn’t be in the business of operating a health insurance program, and that the program run by the Office of Group Benefits could be managed more effectively by a private company.
The governor said privatization would cut the 300-employee group benefits office in half and generate $10 million in annual savings for the state, in addition to an upfront, lump sum payment that could top $150 million. It’s unclear how a $500 million trust fund filled with premiums paid by covered employees would be handled in any privatization effort.
The privatization idea faces opposition from some lawmakers, who would have to approve parts of the arrangement, and current and retired state employees who worry their health benefits might be cut and their premiums increased. Critics say the Office of Group Benefits runs its insurance programs with low administrative costs, and they call the privatization plan a bid to raid the trust fund.
Lawmakers also have complained they’ve been unable to get documents related to the work being done to determine the fair market value of the insurance program.
Kipper previously worked as deputy commissioner at the Louisiana Department of Insurance. He also had been the administrator of the Oregon Division of Insurance and the Nevada insurance commissioner. He’s worked on insurance and regulatory issues in Oregon, California, Texas and Colorado. He started his career as an insurance agent in Wyoming.