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Kessler urges more WV funding for PEIA

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Kessler urges more WV funding for PEIA
By Phil Kabler, Statehouse Reporter, WV Gazette Mail

Senate Minority Leader Jeff Kessler, D-Marshall, urged the Tomblin administration to find additional state funding for the Public Employees Insurance Agency, to alleviate the need to impose $120 million of benefits cuts for public school and state employees and retirees.

In September, Gov. Earl Ray Tomblin notified the PEIA Finance Board that the state contribution for the employers’ share of PEIA premiums for the 2016-17 plan year would remain unchanged, at $422.4 million. With no means to increase premiums for active employees, PEIA has proposed what Executive Director Ted Cheatham called “draconian” cuts in benefits that include steep increases in co-pays, deductibles and out-of-pocket maximums

During Monday’s meeting of the legislative Joint Committee on Government and Finance, Kessler asked acting Administration Secretary Jason Pizatella if there have been any discussions about increasing the state contribution to PEIA.

“That discussion is certainly ongoing,” Pizatella responded.

Under legislation requiring an 80-20 split for employer and employee share of premiums, an increase in state funding would require an increase in employee premiums, but Kessler said he believes most public employees would prefer that to the possibility of owing “a bankruptable amount if they do get sick.”

(Under the proposal, out-of-pocket maximum costs for many family plans would increase $3,000, to $9,000 a year.)

Kessler, who is running for governor in the 2016 election, said he’s particularly concerned about PEIA plans to cut retiree benefits by more than $40 million, including imposing an 8 percent premium increase.

“We’re actually asking them to take an 8 percent pay cut from their retirement benefits,” he said.

Also during Monday’s legislative interim meetings:

• Pizatella told the Council of Finance and Administration that the administration decided to go ahead with state construction projects — including a $7.5 million contract awarded last week to demolish and rebuild four floors in the Capitol Complex’s Buildings 5 and 6 office towers — in spite of the current state budget crunch.

He said the construction projects are funded from state Lottery proceeds through a capital-improvement fund and that bond rating firms have indicated that Lottery revenue is stable.

“We felt comfortable with the budget to that regard,” he said.

• Updating the council on other Capitol Complex construction projects, Pizatella said a $3.04 million perimeter security fence and wall, and a bus-turnaround should be substantially complete by the end of the month, and a $34 million renovation of the Building 3 office building remains on schedule for an October 2016 completion.

He said the state should see savings by moving state employees currently located in rental properties in Charleston and South Charleston into the iconic eight-story office building.

“That is the goal to move people from privately owned space into space on the Capitol grounds,” he said. “We certainly anticipate there to be some savings.”