Making PEIA ‘Fix’ Tougher to Find
Gov. Jim Justice and West Virginia Public Employees Insurance Agency officials are doing the politically smart thing in forestalling an increase in health insurance premiums for an estimated 14,000 people.
In saying the action will have no financial impact, however, they are being disingenuous.
Earlier this year, after public education employees shut down schools for several days, legislators somehow found a way to grant them pay increases. Salary scales were increased by 5 percent, averaging around $2,000 a year for many teachers.
PEIA premiums are linked to how much insured employees are paid, however. The salary increases would have increased insurance premiums for many of them.
That would have cost the affected PEIA enrollees about $600 a year, it has been estimated.
Had that occurred, many of those who forced school closures would have been angry that state officials gave them more money with one hand, then took some of it away with the other.
So Justice is proposing and PEIA officials seem ready to implement a $2,700 increase in salary tiers to which premiums are linked. That should mean the employees will not be bumped into higher premium levels.
Ted Cheatham, director of the PEIA, said the change would be “revenue neutral,” costing the state nothing.
It is true enough that the state would not lose money compared to what is collected in premiums now. But the financially challenged PEIA also will not collect more than $8 million a year it otherwise could have used to avoid across-the-board premium increases or new limits on benefits.
So there is an impact.
Yes, it probably was politically smart to change the premium tiers. But doing so will make finding the “fix” demanded for PEIA finances more difficult.