West Virginia counties prepare for new PEIA health insurance costs

Update (December 7, 2023):On Thursday afternoon, the PEIA Finance Committee voted to approve a 10.5% premium increase for state employees and a 14% increase for local and non-state employees in the 2024-2025 fiscal year. The agency did not pass a proposal for a $147 monthly fee for local employees seeking to add a non-PEIA spouse who qualifies for other coverage. These changes will take effect on July 1, 2024.

Greenbrier County employee Mary Ingles doesn’t have many complaints about her insurance coverage; it helped her through her pregnancy and allowed her family to cover most of their medical needs. But her biggest problem right now is cost.

you pay [so much] A one-month coverage period isn’t as good as those who get it for free, she said, noting that her current coverage isn’t as comprehensive as Medicaid, which she got several years ago while working briefly in the private sector. It’s so frustrating when you know you’re working and giving but getting less and less.

As a specialist at the county licensing office, Ingles pays for home insurance through the Public Employees Insurance Agency (PEIA). The agency insures more than 200,000 public employees in West Virginia, including approximately 30,000 employees who work for local governments and other non-state groups.

Insurance costs rose sharply earlier this year, the result of changes the state Legislature made to repair the agency after years of financial woes and a looming $376 million shortfall. As a result, premiums have increased for all PEIA members across the state, from teachers to correctional officers to city and county employees.

But these costs are not spread evenly. While the state Legislature gave state employees raises to offset premium increases, local and non-state employees are not eligible for the same support.

The hikes could strain the wallets of county employees and the budgets of local agencies that employ them, as the PEIA Finance Committee considers another premium increase next year along with other changes to spousal coverage that could increase annual coverage costs for local employees by at least $1,700. With spending rising and revenue relatively stagnant, county leaders say they can only handle so much before making tough decisions.

“We recognize we have to pay at some point,” said Greenbrier County Commissioner Tammy Tincher.But it’s hard for counties to include it [significant premium increases] If it’s every year, or however long it takes us to get to the PEIA determination.

Counties face budget crunch as premiums rise

PEIA provides insurance to multiple groups. Active employees generally fall into one of two categories: state funds, which administer insurance for those employed by state agencies, state colleges and universities, and county boards of education; and non-state funds, which primarily serve county and municipal governments that choose to use PEIA to insure their employees. .

While the cover offered is the same, the funds are completely separate, meaning employees may face different insurance costs depending on which fund they belong to and the form of government they work for.

For example, when the state Legislature passed an omnibus bill earlier this year to change PEIA, premiums for funds saw varying increases: 16 percent for nonstate funds, and 16 percent for state funds that cover public school teachers and other state employees, and It has increased by about 24% since the teachers’ strike in 2018, which was frozen by Gov. Jim Justice.

At the time, lawmakers believed higher premiums and other reforms were the only way to bring the agency back from the brink of financial disaster.

Now a second increase is underway: The PEIA Finance Committee is scheduled to vote on Thursday to increase premiums for state employees by 10.5%, which will take effect in July 2024. Premiums for non-state employees will rise by 13%. These employees will also have to pay new fees for their spouses enrolled in PEIA while becoming eligible for other coverage, a change that previously only applied to state employees.

PEIA’s current five-year forecast indicates that local premiums could increase by up to 63% between 2024 and 2028.

Hancock County Commissioner Eron Chek said the county budget needs to be able to pay for things like local museums and infrastructure projects. But because local PEIA costs are growing so quickly, less money will likely be available for other county needs, especially in Hancock, and lottery revenue will be reduced.

This year, Hancock and Greenbrier counties, along with several other counties, opted to pay the increase in employee premiums. Cheek said raising costs is important in her county because competition for jobs along the Ohio-Pennsylvania border is so fierce.

‘I don’t know how to eliminate this benefit for employees while we can find and retain them,’ she said. But figuring out the best, smartest approach isn’t an easy choice.

Dr. Steven Eshenaur, executive director of the Kanawha-Charleston Health Department, said continued increases in PEIA premiums are “unsustainable” for county agencies and governments that must bear some of the costs.Photography: PR Lockhart

Like Chek, Dr. Steven Eshenaur, public health officer and executive director of the Kanawha-Charleston Health Department, is concerned that premium changes will make it more difficult to retain employees and recruit new ones. He also worries that more premium increases will strain his agency’s budget.

Last year, we got a fixed budget from the county and city, but we didn’t get any raises. But he said the amount we have to pay to pay for employer benefits has increased significantly. How to do this while staying on budget? You have to find other places to cut it off.

Rising costs can be difficult for employees who are already dealing with inflation.

“I think PEIA was left to its own devices for a long time, and they didn’t take any action but made small changes of one to two percent a year, which was incremental,” said the health department executive with 30 years of experience. said Doug Beasley. Kanawha County Sheriff’s Department. Now it’s booming and popular. And it hurts, more than anything else.

As PEIA decision approaches, counties prepare for next steps

Given that local governments have much smaller budgets compared with the state and tend to offer lower salaries compared with the private sector, local officials fear they will face a challenge in the next wave of proposed environmental impact assessment reforms. series of unique challenges. It’s frustrating that the state legislature’s regulation of PEIA has caused costs to rise so quickly.

The counties or non-state agencies weren’t brought into a room and asked how is this going to impact your budget? Kanawha County Manager Jennifer Herrald said how will this impact your staff? She said the state needs to consider establishing a more stable source of funding for PEIA, a solution advocates have long called for with limited success.

As the next surge approaches, counties and their employees are dealing with uncertainty. The county budget won’t be finalized until next year. While Governor Justice has called for a new round of pay raises to help state employees on PEIA, he has not publicly called for similar funding or proposed other support to aid county and city employees. Asked whether the state Legislature would consider focusing on county and local government struggles during the upcoming session, state Senate and House speakers said legislative leaders were still discussing their priorities.

For now, all local employees can do is wait. For Ingalls, a Greenbrier County licensing specialist, that can cause stress for her and her family.

The concern, she said, was that if premiums continued to rise and we couldn’t afford it, we would have to give up our coverage.

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