As budget remains unsettled, PEIA debate expected to continue
By Jeff Jenkins, WV MetroNews
Funding for the upcoming new plan year for the state Public Employees Insurance Agency will be up for discussion again among state lawmakers when Gov. Earl Ray Tomblin vetoes the budget bill passed by state lawmakers Thursday night.
The bill includes an additional $43 million for the state workers insurance plan, an amount originally proposed by the governor, which would result in a 12 percent increase in health insurance premiums for state workers beginning July 1.
The issue of PEIA funding has been hotly debated for several months after the PEIA Finance Board approved $120 million in benefit reductions in the form of higher deductibles, copays and prescription costs along with higher premiums for retirees at its meeting last December.
The board voted Dec. 10, 2015 to raise premiums because, at the direction of the Tomblin administration, it had chosen to spend down the agency’s trust fund during the last five years without raising what state workers pay for coverage.
“We had no option but to raise premiums at this point because of statutory language saying that the employer pays 80 percent and the employee pays 20 percent of premiums,” PEIA Director Ted Cheatham told MetroNews after the Dec. 2015 vote. “Since the state is already at the 80 percent level and they’re not putting in any additional funding, we can’t raise the employees premiums or they’d be paying more than the required 20 percent.”
Gov. Tomblin proposed an increase in the tobacco tax during his State of the State Address pledging $43 million to PEIA which would have required a 12 percent premium increase.
“The governor has stepped up and offered a great solution to PEIA and to the citizens of this state that we insure,” Cheatham said a few days after the speech. “I think that he’s done a great job trying to get us where we need to be to help those citizens this year.”
The tobacco tax passed the Senate during the regular session but not the House, prompting a response by Tomblin administration Communications Director Chris Stadelman at the time.
“The House of Delegates did not pass those revenue increases, and without a FY 2017 budget there is no guarantee of additional funds for the (PEIA) program.”
The original budget bill approved by the House in March and the one approved Thursday night did include the $43 million.
But Democrats, particularly those in the House of Delegates, have complained PEIA is “not fully funded” with the $43 million addition because the original cuts were for $120 million.
“Every public worker in this state who receives PEIA as a part of their package is about to get a pay cut,” Del. Stephen Skinner (D-Jefferson) repeated during Thursday night’s budget debate.
But Del. Cindy Frich (R-Monongalia) took aim at how the Tomblin administration and the past Democratic-majority have chosen to handle PEIA.
“Because over the years the party in charge did not take care of business and the PEIA board spent down the reserves,” Frich said.
Frich said a 12 percent increase in premiums would mean a $10 increase in monthly premiums for single coverage and a $25-a-month increase for those with family coverage. She said that’s a lot better than the previous “draconian” cuts offered by the finance board.
“We are funding PEIA, again, something that was not done when you were in power,” Frich said directing her comments toward Democrats.
During an appearance on MetroNews “Talkline” Friday, Stadelman said the governor would veto the budget, calling it “irresponsible” for its heavy dependency on one-time monies to fill a projected $270 million revenue hole.