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WV House passes bills to create $150 million PEIA reserve fund

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By Phil Kabler, Charleston Gazette-Mail

Two bills intended to fulfill Gov. Jim Justice’s pledge to set aside $150 million to offset future cost increases for PEIA health insurance benefits were headed to the Senate on Tuesday after passing the House of Delegates by wide margins — despite concern that one of the bills poses a $16 million unfunded mandate for state colleges and universities.

The governor’s bill to transfer $105 million in 2018-19 budget surplus into the new Public Employees Insurance Agency reserve fund (House Bill 2665) passed unanimously, but issues arose over a companion measure (House Bill 3139) that requires state agencies come up with $45 million to cover employees who are paid through special revenue — funds raised from fees, not taxes — or federal funds.

That includes about $16 million assessed to higher education institutions to account for the portion of employee salaries paid through tuition and fees, not from state appropriations.

 

“It’s an unfunded mandate to higher education of $16 million,” Delegate Larry Rowe, D-Kanawha, declared, noting that would be equal to the $16 million in funding cuts to higher education enacted in 2017.

“It’s really back-breaking to higher education,” he said.

The bill, which also sets up the PEIA reserve fund and specifies that it be used to reduce or prevent benefit cuts and/or to reduce premium increases, passed the House 93-6.

Monday evening, Delegate Mick Bates, D-Raleigh, unsuccessfully attempted to amend the bill to include a recommendation adopted by the governor’s PEIA Task Force in January to mandate that employees’ share of future PEIA cost increases not exceed 20 percent of the total cost.

Bates noted that, as part of the resolution of the 2018 statewide teacher strike, Justice appointed the 29-member task force to find a long-term “fix” to rising PEIA costs for teachers and other public employees.

“A promise was made. The promise has not been kept,” Bates said. “My amendment is an attempt to make good on that promise.”

House Finance Chairman Eric Householder, R-Berkeley, argued that it was premature to incorporate recommendations of the task force into the bill, since the task force has yet to submit its final recommendations to the Legislature, a report that originally was due in mid-December.

Bates’ amendment was rejected on a 52-46 vote.