Finance board for state insurer goes with straight premium increases

By Brad McElhinny

The board overseeing finances for the Public Employees Insurance Agency went ahead with straight premium increases to get in line with recently passed legislation.

The finance board made that decision today while ruling out hybrid proposals that would have meant lower premium increases offset by higher deductibles, out-of-pocket costs and prescription costs.

The upshot is, state employees and educators will see premium increases of roughly 24 percent starting with the new fiscal year, July 1. Workers who are insured by local government agencies that opt into PEIA will also see premium increases of 15.6 percent.

That was the main issue that finance board members had to decide Thursday afternoon, following four public hearings around the state this week. The board also made official additional monthly surcharges between $140 and $150 for spouses who opt into PEIA, depending on the specific plan.

Mark Scott

Administration Secretary Mark Scott, who serves as chairman of the PEIA Finance Board, said the decision to rule out the hybrid proposals for cost increases for state employees occurred earlier this week.

The finance board did discuss what to do for employees of local governments that opt into PEIA. Board members said they heard from representatives of those government agencies that they also wanted to go with the straight premium increase.

“Everybody I talked to, everybody was for option one,” said board member Jason Myers.

Scott, the chairman, agreed.

“It seems like that’s what the non-states are interested in. They’re interested in the premium increases only, which, quite frankly, was surprising. I thought they might want to look at blended, but apparently they feel like they can handle premium increases in their budgets,” Scott said.

The cost increases for workers is occurring because of legislation prompted by financial strains for PEIA.

A broad plan passed by the Legislature mandates a return to an 80-20 cost share between government employers and public employees. That ratio had gotten out of whack in recent years because of a reserve that state officials originally set up to hold premiums flat.

The Legislature also approved $2,300 pay raises for state workers, described as an offset for the increased insurance costs.

Labor organization leaders said a 24 percent premium increase is now a lot to absorb all at once.

Elaine Harris

“But I think at the end of the day, the one option is the best,” said  Elaine Harris, representative of the Communications Workers of America, comparing the straight premium increase to the blended options.

Fred Albert

Fred Albert, president of the American Federation of Teachers-West Virginia, said workers will get sticker shock, though.

“Because a 24.2 percent premium increase all at once is a heavy lift for our employees who have given their lives to the students and families of our state,” Albert said.

Albert noted prior public statements by Gov. Jim Justice that insurance rates wouldn’t go up on his watch. “Well, we’re still on his watch,” Albert said. “We say we got a pay raise, but it’s a pay shift. It’s a shift of money.”

Worse, Albert said, this might not be the last change.

“This is not a permanent fix,” he said. “We’ll be here again. We all know that. This is not a permanent fix. We can see more train wrecks coming down the track.”


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