KPS delivers bad news to 70 of its employees
June 12, 2008 · Updated 9:54 AM
"The Kitsap Physicians Service management team delivered pink slips to nearly half its staff Monday in an effort to trim overhead costs.The layoffs come only three months after the state insurance commissioner petitioned for financial control over the insurance provider. At its lowest point, KPS debt was estimated at $9.1 million.People knew this was coming and people were sort of anticipating it, said Jim Stevenson, a spokesman for Insurance Commissioner Deborah Senn. It will be good to have it out of the way. The 70 laid-off employees (from a total workforce of 155) have staggered exit dates. Only 18 will leave this month. The rest will leave between now and the end of February.The immediate savings are not that big. Youre talking about a substantial decrease in payroll from the 210 employees they had three months ago to the 85 that we expect to be on at the end of February, Stevenson said.KPS Health Plans is offering resources to aide the laid-off employees in their quest for new jobs. The resources include severance packages with an option to continue health-care coverage, vested 401k pension plans left intact, employment counseling and job-hunting tips, and personal assistance for stress management.Also, if available, the employees affected by this round of layoffs will have first dibs on new job openings.Insurance commissioner officials estimated early on that they may have to cut up to 75 percent of the KPS payroll. They attribute high retention of commercial contracts with their ability to keep more employees. Ten of KPS 150 commercial contracts opted to leave the insurance provider, while only 6 percent of its educator plan enrollees left.The substantial reduction in staff comes after a similarly substantial reduction in enrollment. Since the receivership took place in August, KPS enrollment has dropped 31,000 from its 72,000-person base.Of the 70 employees to be laid off, 10 are customer service representatives. The remainder come from union and non-union positions, including some management personnel.Officials say the rehabilitation effort is on track. Thurston County Superior Court reviewed the groups progress two weeks ago and approved its continuance.Further, the Bremerton City Council authorized Mayor Lynn Horton to bid on purchasing the KPS building at 400 Warren Ave. Sale of the building, if it goes through, will provide some cash for the company to pay claims and repay debts."