Lawsuit: Neb. Discriminated Against Black Workers with Insurance Choices

November 6, 2007

The state of Nebraska discriminated against its black employees because state workers who live in Lincoln and Omaha were offered inferior health insurance than their counterparts in other parts of the state, according to a lawsuit.

The lawsuit, to be filed Monday in Lancaster County District Court, alleges that state employees outside certain zip codes had the option of a “significantly better health insurance plan” from Blue Cross & Blue Shield that had a more extensive network of doctors and better coverage.

State employees living in zip code areas that begin with either 680, 681 or 685, where some 96 percent of the state’s black employees reside, were given a choice between two Mutual of Omaha plans and two Blue Cross & Blue Shield plans which offer inferior coverage, according to the lawsuit.

“Black citizens should get the same benefits as white citizens,” said Vince Powers, one of the plaintiff’s attorneys. “I can’t believe I’m saying that in 2007.”

The better Blue Cross & Blue Shield plan considers many national hospitals, such as the Mayo Clinic in Minnesota, an “in-network facility,” meaning the plan pays more of the bill.

By comparison, one of the Mutual of Omaha plans requires employees to pay 40 percent of the cost at facilities like Mayo.

The state changed its health insurance offerings for 2007 and restricted the choices employees had based upon where they lived.

The Nebraska Association of Public Employees filed a grievance when the different health insurance plans were presented to state workers.

“We didn’t believe they were equal,” said Mike Marvin, the union’s executive director.

The union grievance did not result in any changes to the plans.

State personnel officials defended the plans offered to employees statewide as equivalent plans.

“We believe that the plan design is the same,” said Laura Peterson, general counsel for the Department of Administrative Services.

Nebraska Attorney General spokeswoman Holley Hatt declined to comment.

The lawsuit is based on several U.S. Supreme Court rulings and the 1964 Civil Rights Act that prohibits employment discrimination.

The high court has held that company policies and practices that have a discriminatory effect are illegal even if an employer never intended to discriminate against employees.

“Good intent or absence of discriminatory intent does not redeem employment procedures or testing mechanisms that operate as ‘built-in headwinds’ for minority groups and are unrelated to measuring job capability,” the Supreme Court said in the 1971 Griggs v. Duke Power Co. case.

The lawsuit is being filed by Powers and another attorney, Kathleen Neary, on behalf of Sandra Cartwright, who works for state Health and Human Services System in Omaha.

Powers and Neary plan to ask a judge to certify the lawsuit as a class action covering all the state employees who were discriminated against.

The lawsuit seeks better health insurance for state employees in Lincoln and Omaha. It also asks for compensation for employees who paid higher premiums or received large medical bills for services that would have been covered under the better insurance plans.

Peterson said every state employee has four choices in health insurance plans, and that each of the four levels of plans carry the same copays and deductibles.

Peterson said she didn’t know how the networks of doctors Mutual of Omaha offered compared to the Blue Cross & Blue Shield plans, and the state employees who know the health insurance plans better than Peterson weren’t available to comment Friday.

During 2007, Mutual of Omaha sold its health insurance business to Coventry Health Care, which continued providing similar benefits to state workers.

Powers said the 2008 health insurance options state employees are currently signing up for are similar to the 2007 system.

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