West Virginia PEIA Plan Changes Approved, Including 24% Premium Increase
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CHARLESTON -- The board that manages health care coverage for more than 230,000 West Virginia public employees and retirees on Thursday finalized changes to the health plan put in place by Gov. Jim Justice and the Legislature during the 2023 session.
The Public Employee Insurance Agency (PEIA) Finance Board met Thursday afternoon and voted to implement changes to the plan mandated by the passage of Senate Bill 268.
The bill returns PEIA to an 80/20 employer-employee match beginning in July for in-state medical care and 70/30 for out-of-state medical care for non-contiguous out-of-state counties. According to PEIA, a return to an 80/20 plan will raise premiums for state employees by 24.2% for all salary tiers but result in no changes to benefits and no premium increases for retirees and non-Medicare retirees.
The bill would change the price of the plan for spouses of PEIA participants who have access to health insurance coverage to the actuarial value of the PEIA plan, which could cost plan participants an additional $147 per month during the next plan period, according to PEIA.
SB 268 also sets the reimbursement rate for all health care providers at a minimum of 110% of what Medicare reimburses, sets numerous requirements for members of the PEIA Finance Board, requires a five-year analysis of potential future costs to the program and an actuarial study of the plans offered by PEIA.
In anticipation of Thursday's emergency meeting, the PEIA Finance Board held four public hearings across the state between Monday and Wednesday to receive feedback from state employees and retirees. Open enrollment begins Sunday.
The PEIA Finance Board also approved a 15.6% premium increase for non-state plan participants, leaving plan benefits unchanged. Non-state plans include county and city participants.
At the public hearings this week, non-state plan participants were presented with three options, included options that blended smaller premium increases with higher deductibles, out-of-pocket costs and prescription drug costs. Board members said they heard support from public hearing attendees for taking on the premium increase only.
"Of everyone I talked to, everyone was for option one," said board member Jason Myers, who made the motion for the board to accept option one.
"I spoke to a lot of people who made comments … and it seemed like that was what the non-state (participants) were interested in," said board Chairman Mark Scott. "They're interested in the premium increase only, which quite frankly was surprising. I thought they might want to look at a blended plan, but they feel like they can handle the premium increases in their budgets."
PEIA premiums have remained mostly unchanged since 2012, while premium increases for those on private insurance have seen increases of 47% over a similar time frame, according to the Kaiser Family Foundation. PEIA bases coverage on income when most private insurers base coverage on health risk.
According to the West Virginia Chamber of Commerce, the average total monthly PEIA premium for a family earning $50,000 per year is $1,262 per month, while a similar family on private employer-based coverage has an average total monthly premium of $1,949 per month.
According to projections from PEIA, the program was slated to see an estimated $424 million deficit by 2027 before the implementation of SB 268. According to figures from the Senate Finance Committee, SB 268 would provide $76 million in savings in year one and more than $500 million in savings by 2027.
State employees, teachers, school service personnel, and West Virginia State Police employees received their fourth pay raise since Justice took office in 2017 in the amount of $2,300 beginning in July. The raises were included in the governor's budget bill and a separate bill, both signed into law nearly two weeks ago.
According to Justice, state employees earning less than $133,000 annually would still see a net increase in pay when factoring their $2,300 pay raise and the tax cut/rebate benefits in Senate Bill 2526. But during the legislative session, multiple union groups representing public employees argued that an employee earning between $28,000 and $38,000 could see a loss of pay of $193.96 the first year.
"A 24.2% 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," said Fred Albert, president of the West Virginia Chapter of the American Federation of Teachers during the public comment portion of Thursday's PEIA Finance Board meeting. "(Justice) kept our premiums from rising during his administration and he said never on his watch ... would premiums increase. Well, we're still on his watch."
"We still have a lot of work to do. The Legislature still has a lot of work to do," said Dale Lee, president of the West Virginia Education Association. "There will continue to be questions during this enrollment period, and we will help answer all the questions that we can."