Too soon to know if PEIA retiree premiums will rise
By Phil Kabler, The Charleston Gazette-Mail
Days after the state Public Employees Insurance Agency Finance Board was notified the plan will need nearly $60 million of premium increases for active state employee coverage for the 2016-17 plan year, Administration officials said it is too early to tell if similar increases will be needed for retiree health coverage.
“By September or October, they’ll have more information,” Administration spokeswoman Diane Holley-Brown said Monday. “Right now they’re just trying to crunch the numbers.”
On Thursday, PEIA Finance Board members were notified that shrinking reserve funds and a projected $42 million budget deficit in the active state employee plan will require PEIA to make up nearly $60 million in the 2016-17 plan year, which begins July 1, 2016.
That will require either premium increases – which would work out to a 6.5 percent to 7.5 percent in employee premiums – or make cuts in health care coverage.
In the current 2015-16 plan year, PEIA cut coverage benefits by $40 million, primarily through increases in employee co-pays and deductible, after the Tomblin administration did not increase state funding for the employer’s share of premiums.
PEIA executive director Ted Cheatham said Gov. Earl Ray Tomblin will provide a letter later this month indicating what amount of funding for PEIA employer premiums will be included in the 2016-17 state budget.
Under an 80-20 employer/employee premium split in state PEIA law, the employee’s share of premiums can increase only if the state funding for employer premiums is increased.
For retirees, PEIA operates a separate Health Benefit Trust.
PEIA actuaries said Thursday the fund’s balance at the end of the 2015-16 budget year is projected to be at $722 million, or about $10 million below original projections.
That’s primarily because investment earnings for the 2014-15 budget year came in $28 million below projections at $14.5 million.
Medical claims and prescription drug claims combined for 2014-15 came in about $10.1 million below estimates of $113.8 million.
“In a couple of months, we should have a little bit better numbers,” Holley-Brown said of any potential premium increases for PEIA retirees.
The Finance Board will meet in October to come up a preliminary 2016-17 plan, which will be taken out to public hearings around the state in November.