PEIA board OKs $40 million cuts in benefits

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By Phil Kabler 
The Charleston Gazette

State and public school employees and retirees in West Virginia will pay about $40 million more for health care next year, after the Public Employees Insurance Agency Finance Board approved a series of benefit cuts Thursday — primarily involving higher co-pays and deductibles.

After approving the cuts, effective July 1, 2015, board members voted to send a letter to Gov. Earl Ray Tomblin and all members of the Legislature urging them to come up with funding in the 2015-16 state budget to offset the cuts.

“Clearly, the primary reason we’re here today making these dreadful decisions is because we’ve gone several years without additional employers’ moneys,” said Josh Sword, who represents education employees on the board.

Representatives of the two major teacher unions spoke out against the benefit cuts, which they said, combined with low salaries, will make it increasingly difficult to recruit and retain qualified teachers.

West Virginia Education Association President Dale Lee said it is unfair for PEIA to force employees and retirees to bear the entire burden of making up the budget deficit.

“All the costs are being borne on the back of the employee,” he said, adding, “With $30 million this year, and what I’ve heard is $80 million next year, the employee can’t bear all the cost.”

Thursday’s vote cut benefits for active employees by a total of nearly $33 million, with $8.5 million in cuts for retirees in the 2015-16 plan year. PEIA’s five-year financial plan projects that, if employer premiums are not increased by $80 million in the 2016-17 plan year, that amount will have to be made up with additional benefit cuts.

“I understand the difficult decisions you had to make,” Lee told Finance Board members, “but to put the costs solely on the backs of the employees is simply wrong to me.”

During public hearings around the state in November, PEIA insurees were asked to select what benefit cuts would be less onerous from a list of possible reductions. Additionally, PEIA Executive Director Ted Cheatham said more than 4,200 insurees completed a survey on benefit reductions.

Ryan Frankenberry, of the American Federation of Teachers/West Virginia, called it the “Pick Your Pain Plan.”

“We deserve an affordable health-care benefit during employment and in retirement,” he said.

Key cuts include:

| Raising generic drug co-pays from $5 to $10 for 30-day supplies, and from $10 to $20 for 90-day supplies, at a total cost of $10.7 million per year.

| Increasing the family out-of-pocket maximum for Preferred Provider Plans A and D to double the employee-only maximum, at a total cost of $6.75 million. The amounts are on a sliding scale, based on the employee’s salary.

| Increasing primary-care physician office visit co-pays from $15 to $20, and specialist office visit co-pays from $25 to $40, at a total cost of $5.7 million.

Board members also voted to approve a “Healthy Tomorrows” program, which will require active employees and pre-Medicare retirees to meet certain healthy-lifestyle requirements or pay an additional $500 deductible each year.

In the coming year, insurees will simply have to identify their primary-care physician. In the second year, they also have to report their blood pressure, glucose, cholesterol and waist circumference. By the third year, they must meet certain acceptable threshold levels for those tests or have a statement from their physician explaining why they could not meet those requirements.

“I recommend to the board that we approve this program to get people more involved in their health care,” Cheatham said before the vote.

The initial proposal Thursday for benefit cuts also called for eliminating coverage for massage therapy, to save PEIA $600,000 a year, but the board voted to retain that coverage on a motion by board member Troy Giatras.

Afterward, Giatras said massage therapy is relatively inexpensive, and often can help patients avoid more invasive treatments, as well as costly medications, including painkillers.