PEIA board re-approves plan with premium increases

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PEIA board re-approves plan with premium increases
By Phil Kabler, The Charleston Gazette-Mail

PEIA finance board members on Thursday approved what could be called 2016-17 PEIA Finance Plan version 4.0.

Last October, with its reserve fund emptied and seemingly no likelihood of additional state funding, the board reluctantly approved what became known as the “draconian” plan to cut benefits for active West Virginia government employees and retirees by $120 million, in the form of significantly higher co-pays, deductibles and out-of-pocket maximums.

In January, after Gov. Earl Ray Tomblin pledged in his State of the State address to provide an additional $43.5 million in the budget to cover employer premium increases, the board adopted a new plan, ditching the severe benefits cuts but imposing about $14 million in employee premium increases, as required under state law mandating an 80/20 match on employer and employee premiums. The funding increase, however, was contingent on the Legislature approving the governor’s proposal to increase tobacco taxes.

In March, after the Legislature adjourned its regular session without passing either a budget bill or a tobacco tax increase, launching what would become a 92-day budget impasse, Finance Board members met again and declared that they had no choice but to reimpose the draconian cuts for about 230,000 public employees and retirees covered by PEIA.

Finally, on Thursday, 10 days after the Legislature approved a 2016-17 budget bill that includes the $43.5 million increase for employer premiums, as well as a companion bill that sets aside $15 million a year for four years to ease retiree premium increases and begin to rebuild the reserve fund, the board officially approved a 2016-17 PEIA benefits plan — with just a week to spare before the new plan goes into effect.

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