CHARLESTON — Union leaders gathered on the front steps of the House of Delegates to push back on a bill affecting insurance for public employees, but the bill lines up for passage as soon as today’s session.
“Encourage your legislators to slow this down,” said Fred Albert, president of the American-Federation of Teachers-West Virginia.
Josh Sword, president of the West Virginia AFL-CIO, also urged, “We’re encouraging lawmakers to slow down, slow down.”
Slowing down seemed unlikely as the House of Delegates pushed the bill affecting the Public Employees Insurance Agency toward passage today, one week prior to the regular session’s conclusion. Lined up for passage votes today are the PEIA bill, accompanying pay raise legislation and the House’s version of the budget bill.
The House Finance Committee discussed and passed the broad-ranging PEIA bill over more than two hours Thursday afternoon. Delegates also advanced a separate bill for $2,300 cross-the-board pay raises for State Police and teachers, whose pay scales are set in code. Other state employees are meant to get the same raise through the budgeting process.
Senate Bill 268 makes a range of changes to PEIA, out of concern that the agency faces growing financial stress.
Delegate Erikka Storch, R-Ohio, favors the bill as a way to keep the insurance program sustainable for the long term.
“It’s not a perfect option, but we have got to come up with some way to stabilize this,” Storch said on MetroNews’ “Talkline.” “If we throw money into a boat that has a hole in it, where’s that money going to go?”
One of the major goals of the bill is to return insurance costs to an 80-20 split between the employer and employees.
That has been the cost ratio set in state code, but it has gotten out of whack over the past few years after the governor and the Legislature established a reserve fund. The governor has promised no PEIA premium increases for employees during his time in office, which concludes in 2024.
With premium increases essentially capped, state officials have said the effect has been making the ratio more like 83-17.
A five-year PEIA outlook released last year anticipates keeping employee premium increases at zero through 2027. But costs to the state would go up exponentially over those years.
By 2027, the outlook anticipates, state government would have to transfer an additional $376.5 million in public funds to bolster the insurance program.
A return to 80-20 could mean a significant and rapid adjustment for employee out-of-pocket costs.
There are about 230,000 participants in the insurance program for public employees.
Dale Lee, president of the West Virginia Education Association, said that rapid adjustment will sting many workers. “We’ve known since the task force of 2018-19 that the employees were going to have to have skin in the game,” Lee said after Friday’s press conference.
He recalled that a recommendation from the PEIA Task Force of that time that the state would provide no less than 80% of medical costs and employees would provide no more than 20%.
“We still believe that, but to make up the three years where money was put in through the reserve fund to prevent the premium increases — and while everybody was appreciative of that at that point — to make us go back and make that up is not the right thing to do. If we want to do this, let’s start from this point on and have no less than 80% from the state, no more than 20% from employees.”
Another aspect of the bill would only allow spouses who aren’t public employees to remain on PEIA if they buy in at actuarial-determined rates. Testimony in this week’s finance meeting indicated that would be about $147 a month.
Legislators and Gov. Jim Justice have said a recommended $2,300 across-the-board pay raise along with a tax cut proposal will help employees make up the difference in their insurance costs.
“What I’ve wanted to do and insisted upon is, we did not have any pocket increases in PEIA,” Justice said at a briefing this week.
And what we’ve done is we’ve tried to cover that as best we possibly can. We’re doing a pay raise that will cover — everybody, I think, that is less than $133,000 of income; everybody that is less than that is getting some level of pay raise and getting some level of PEIA and go to bed tonight and know that as the future goes forward PEIA will go with them and exist.”
The governor concluded, “It’s not too bad a payoff in my book.”
Sword told reporters a pay raise would need to be more than $3,000 in most cases to really achieve that balance.
The numbers don’t add up, agreed Elaine Harris, a representative from the Communications Workers of America. Among the employees she represents are corrections officers.
“With the figures we have, and with the percentage increase — and let’s just say for discussion purposes it’s a 26% increase — they’re in the hole as far as that pay raise of $2,300,” Harris said after the press conference.
Harris wanted greater opportunities to talk through the financial situation with elected representatives. The bill quietly moved through the Senate before a vote and passage. Now it’s up for passage in the House.
“If you don’t come to the table, you’re on the menu,” she said.
“These people right now are on the menu and not in a good way. So let’s bring stakeholders to the table, let’s talk about it. I mean, I would be naive to think healthcare costs haven’t risen. They have. I negotiate contracts in the private sector. But when we sit down, we sit down collectively to come up with something that brings us to an agreement. That’s what needs to happen here.”
