Alternative funding not yet identified for PEIA

You are here

Alternative funding not yet identified for PEIA
By Phil Kabler, The Charleston Gazette-Mail

While legislative leaders are touting possible alternative funding options to ease $120 million of benefits cuts for West Virginia’s Public Employees Insurance Agency insurees, nothing definitive has been found, officials said.

Shortly after the PEIA Finance Board approved what have been termed “draconian” cuts in benefits for active employees and retirees, House Speaker Tim Armstead, R-Kanawha, issued a statement indicating that legislative leaders are working with the Governor’s Office and PEIA to come up with “potential alternative funding solutions” short of raising taxes.

However, at this point, no alternative funding sources have been found, officials said.

“The governor certainly is willing to look at options but, as everyone’s aware, it’s an extremely tight budget year,” said Chris Stadelman, spokesman for Gov. Earl Ray Tomblin.

After three consecutive years of spending cuts, the 2015-16 state budget is on pace to come up about $250 million short of projections, with Department of Revenue officials not anticipating a significant rebound in the 2016-17 budget year.

“It’s difficult to identify where the revenue would come from,” Stadelman said. “There are only so many accounts that are discretionary spending.”

He added, “I don’t think the door’s closed on finding additional revenue, but we have not found it, to this point.”

After approving the most recent cuts to PEIA coverage, the Finance Board adopted resolutions urging the Legislature to come up with funding to offset the affects of higher copays, deductibles and out-of-pocket maximums for the plans, and calling for an increase in cigarette taxes with the revenue dedicated to paying PEIA premiums.

The proposed benefit cuts for active employees will take effect July 1, 2016, while cuts for retirees will begin Jan. 1, 2017.

Under state law, the PEIA Finance Board cannot increase employee premiums without a corresponding increase in state funding for employer premiums, with a requirement that there be an 80-20 split in employer and employee shares of premium costs.

Armstead and Senate President Bill Cole, R-Mercer, took umbrage at the board’s calls for additional funding from the Legislature, with Armstead accusing public employee representatives of the board using the calls for increased state funding as a “political football.”

Jared Hunt, spokesman for the House of Delegates, said discussions by legislative leaders to find alternative funding sources for PEIA have been ongoing but added that he has not been privy to those discussions.

“I think they’re still looking at what they can do with this,” he said. “They really don’t want to discuss specific things yet, since the discussions are ongoing.”

Cole could not be reached for comment Tuesday.