CHEYENNE -A University of Wyoming plan to offer vouchers for health insurance coverage for domestic partners of university employees could start a trend in state government, some legislators caution.

The UW Board of Trustees voted 6-5 for the voucher plan May 30 during a meeting in Jackson.

The plan, according to the board action, can only be put into effect if UW President Tom Buchanan decides the university is in healthy enough financial shape to afford it.

The university cut $18 million from its budget to accommodate Gov. Dave Freudenthal's request for spending curbs in response to diminished revenue forecasts.

For several years, UW administrators have been considering offering domestic benefits to employees in order to compete for faculty with other universities that offer the coverage.

Two years ago, the board of trustees directed the UW administration to retain a consultant qualified to help UW evaluate the feasibility of providing health insurance coverage for domestic partners.

In July 2008, Buck Consultants delivered a report to university officials that concluded a voucher program was the most appropriate mechanism. The program will cover domestic partners of either sex and is patterned after those at other universities. according to a UW release.

"In the coming months, UW administrators will oversee the development of the voucher program," the UW release said.

Senate President John Hines, R-Gillette, said Thursday he doesn't support the voucher idea but pointed out the university has a block grant so it has freedom to spend the money as the trustees see fit.

"If they don't use the money wisely maybe they don't need as much," Hines said.

Huge Policy Change

UW Trustee Betty Fear of Big Piney said Thursday the tight budget was the reason she voted against the voucher plan.

The motion came after the trustees had been in budget sessions for several days.

"My position is it was not in the best interests of the university to add a new program at this time," she said in a telephone interview.

It did not seem prudent, she said, given that she sees companies in the private sector struggling to keep their employees insured and having to eliminate family coverage.

"That's a huge change in policy," said Rep. Ann Edmonds, R-Cheyenne, who has experience in health insurance as an underwriter.

She said would like to read the consultant's report to determine how this will affect the state health insurance pool and where it will lead ultimately.

"I'll definitely be looking into it," she said.

"I'm confident we're going to have to evaluate this whole thing. Because it you start vouchers for health insurance that is a dangerous path to go down," aid Rep. Owen Petersen, R-Mountain View.

He said he is concerned it will set a trend for other agencies.

"Before that is implemented there ought to be a review of this this at least by a committee of the Legislature," he said.

Approving the Concept

UW Provost Myron Allen said the question the before the board was whether to approve the concept "recognizing that we just got $18 million removed from our budget so we're going to be paying for fewer things not more things at least for the future fiscal year."

The plan would cost $60,000 to $70,000 per year, but the numbers are only estimates "because we don't know who would sign up for them," Allen said.

The university pays 85 percent of the cost of each employee's health insurance through the state's group health insurance program.

The state plan currently doesn't cover unmarried domestic partners.

"The issue for us was, is there something the University of Wyoming can do," Allen said. "We can't unilaterally change what the state group plan covered. So we hired a consultant to tell us what are the better options."

The best option the consultants found was for the university to pay vouchers so these employees could buy health insurance on the market.

"We may be the first state agency that tries to accommodate this need," Allen said.

If other state agencies want to follow suit, he added, it would make more sense for the state to change the group plan.

"It would be a lot cheaper," he said.

Ralph Hayes, manager of the state employees' and officials' group insurance program, said the university is the only state government entity that has shown interest in covering the domestic partners of employees.

"We don't even provide coverage for domestic partners, let alone same sex partners," he said.

"The state basically only recognizes marriage as valid family coverage."

Provost Allen said in a release that UW competition includes research universities and corporations that offer domestic partner benefits.

More than half the companies of the Fortune 500 offer them as well as 42 percent of colleges and universities in a survey by the College and University Professional Association for Human Resources.

A Voluntary Household Plan

The study by Denver-based Buck consultants recommended that a "Voluntary Household Plan" be structured as a voucher arrangement limited to domestic partners, regardless of gender and their dependents only.

The university would sponsor the plan by vetting and offering a selection of individual product plans for brokers.

The Wyoming Health Insurance Pool (WHIP) "can be a fallback source of coverage for anyone denied individual coverage," the report said.

It added that any voucher toward WHIP, or any other state uninsurable pool plans, should probably be addressed informally. meaning any UW Voluntary Household Plan documentation "stops' at the point an applicant is denied individual coverage.

"Individual products are the only available insured-plan option, except for one or two carriers who seem willing to 'build' an insured group plan option," the consultant's report said.

Building this option will take time and will require the university to broaden eligibility.

A voucher plan sponsored by the University raises "employer plan issues" with the Health Insurance Portability and Accountability Act (HIPAA) or financing of the Wyoming Health Insurance Pool, the report said.

But the plan "also allows the university to demonstrate to employees that, by and large, employee health coverage is not limited by how they define their family unit," the report added.

Contact Joan Barron by e-mail at joan.barron@trib.com or by phone at (307) 632-1244