The Public Employees Insurance Agency, which ended the past fiscal year $93 million down, needs some extra time to come up with a financial plan for next year.
This is usually the time of year when PEIA comes up with a plan, presents it to its financial oversight board and goes out to public comment at a few stops around the state. After that, the proposal goes to the Legislature for budgeting for the coming year.
But when the PEIA Finance Board met Thursday afternoon, agency director Jason Haught said the plan wasn’t quite ready. He proposed taking just a little more time and presenting a complete version in about two weeks.
“I would like to apologize to the board. PEIA has not been able to complete its ‘24-year plan to present to the board. As you see, it was in the agenda and we thought we were going to be able to achieve this by today, but there was not the ability to do so to get to the completion of that finance plan,” he said.
“As you know we had an extremely difficult 22. We are trying our best to make sure we are including all of the 23 results before we put together a five-year finance plan.”
Haught said agency officials reluctantly made the decision to delay, but that was necessary to gather as much financial information as possible.
“So, again, my apologies. But I want to be right. When you have good numbers, it’s easy to come up with a financial plan,” he said, but bad numbers are a greater challenge for planning.
PEIA over the past fiscal year had pressures of increase demand for drug and medical expenses with lower-than-anticipated return on investments. Much of that was attributed to societal behaviors and economic effects coming out of the COVID-19 epidemic, and the officials overseeing the state insurance agency now hope much of that will smooth out.
West Virginia Education Association President Dale Lee spoke at the meeting and expressed concern about the financial future of the insurance program.
“I understand the bad 2022 year that we had and the desire to have everything correct to take to the public hearing,” Lee said. “What that tells me is, at least, in my years of doing this is we have some trouble coming in the next, future years.
“While I really believe this year’s plan that will be taken out, the 2024 fiscal year, will not show any increases for employees — the governor has said that’s his desire, and I believe that will be the desire of the board — at some point we have to pay the piper. And I know you get tired of me saying every year that we’re in trouble in years to come.”
A statewide teachers strike in 2018 focused on instability with insurance costs for educators. After that, a PEIA Task force met regularly for several months, but its work was halted before any recommendations were implemented.
Gov. Jim Justice has promised his administration will cover any shortfalls with PEIA during his time in office, which runs to 2024. Right now, the state has enough money to do that with the governor touting a $1 billion general fund surplus this past fiscal year.
But as the governor has traveled the state in recent weeks, he has expressed concern about PEIA’s financial stability over the longer term. His remarks have been in the context of his skepticism over constitutional Amendment 2, which would allow the Legislature to exempt personal property taxes on vehicles and for businesses on their inventory, machinery and equipment.
Justice has described the possibility of unforeseen economic circumstances that could put West Virginia in a bind for programs like PEIA.
“The wheels are going to fly off, guarantee it. They fly off in every one of our lives all the time,” he said in South Charleston this week. “It’s either going to be PEIA needs money, we need pay raises, we need matching dollars to get federal funds, whatever, Medicaid, whatever — we’re going to have some bumps in the road.”
Friday in Richwood, he reiterated that concern. “What happens if PEIA goes upside down?” he asked. “What happens if stuff happens?”
When the PEIA board does go out with the coming year’s plan, the locations and dates include: 6 p.m. Nov. 9 at the Culture Center in Charleston, 6 p.m. Nov. 10 at the Beckley-Raleigh County, 6 p.m. Nov. 15 with a telephone town hall, 6 p.m. Nov. 16 at Holiday Inn Martinsburg, 6 p.m. Nov. 17 at Holiday Inn Morgantown and 6 p.m. Nov. 18 at Wheeling’s Highlands Event Center.
