The finance board for West Virginia’s Public Employees Insurance Agency approved another round of significant premium increases, with union leaders warning that the costs are likely to affect morale.
“There are other places, especially with our borders, where they can go and where the benefit packages are much better,” said Elaine Harris, representative at the Communication Workers of America, which represents some state workers like corrections workers and State Police.
“We want to keep the people here. We need them.”
PEIA had outlined potential premium increases weeks ago before voting to approve them today. The rate increases include:
- 10.5% premium increases and no benefits changes for state employees who get the insurance.
- 14% premium increases for employees of local governments that opt into PEIA. The proposal originally had been a 13 percent increase plus the addition of a $147 surcharge for eligible spouses, but finance board members made a change after discussing the alternative.
- No changes in premiums or benefits for retirees who are eligible for Medicare.
- 10% percent premium increases and no changes in benefits for people who are old enough to have retired but not old enough to be eligible for Medicare.
The increases would be for the fiscal year that starts next July 1.
The approval occurred after the PEIA board heard public comment at several locations around the state over the past few weeks.
The premium increases are happening in large part because earlier this year the Legislature passed a multi-faceted bill in response to financial strains, making it mandatory that PEIA conform to an 80-20 cost split between the employer and employees.
“You’ve been handed a job to do. You don’t have a lot of control,” Fred Albert, president of American Federation of Teachers-West Virginia, told the PEIA Finance Board.
“But I do have concerns. I have concerns because we have a teacher and service personnel shortage in our state.”
The 80-20 split has been the cost ratio set in state code, but it got out of whack over the past few years after the governor and the Legislature established a reserve fund that PEIA could use to cushion its costs. The governor had promised no PEIA premium increases for employees during his time in office, which concludes in 2024. “Not on my watch. Period. Period,” he had said.
Now, PEIA costs for employees will have gone up two straight years.
During the fiscal year that started July 1, state employees and educators took on increases of about 24%. Workers insured by local government agencies that opt into PEIA got increases of 15.6%.
“I don’t know of any other private plan that is going to see a 34.7% increase in two years,” said Dale Lee, president of the West Virginia Education Association.
“That is something that the workers of West Virginia can’t absorb. Simply can’t absorb that.”
Governor Justice and lawmakers tried to offset the prior premium increase with average 5 percent pay raises for state workers and educators.
And now, just ahead of the next legislative session, Justice has informally suggested another 5% increase would be appropriate.
“There’s still lots of balls in the air as far as the budget and everything. We don’t have it finalized in any way quite yet,” Justice said during a briefing late last month.
The governor left some latitude to what extent pay raises might offset the current insurance premium increases.
“I think we’ve got a pretty good track record on that and there’s no question the health insurance it just keeps going up, up, up. From the standpoint of folks out there hurting from food prices or gas prices, we want it to be the very best we can possibly make it. So we’ll craft that,” he said.
It’s not finalized as an ironclad 5% at this point in time, but that’s not a bad deal either. But we’ll make it happen and surely send it up to our folks upstairs and hopefully they’ll go with us and get that done.”
