Members of the Public Employees Insurance Agency's finance board unanimously voted Tuesday to cut health benefits by $18.4 million and take steps that will reduce the plan's long-term liability for retiree premium subsidies by $5 billion.
Employees will see their co-payments rise for urgent care, emergency room care and specialist visits. New co-payments will be established for gastric bypass surgery, medically necessary dental procedures and physical, occupational, speech and massage therapy services.
With PEIA's coverage costing about $600 million a year, the benefit cuts represent a reduction of about 3 percent.
The board also voted in favor of an initial cap on retiree premium subsidies of an average $343 per month. The cap could increase over time, but by no more than 3 percent per year.
Finance board members said the cap would cut in half the state's $10 billion liability for so-called Other Post Employment Benefits - basically retiree health insurance premiums.
They hope to eliminate the liability completely by 2040.
State teachers union representatives asked board members not to approve the contribution cap or the 3 percent increase cap.
Dale Lee, president of the West Virginia Education Association, suggested members wait for state lawmakers to pass a cap in January's legislative session. He said legislators' plan likely would include a funding source to pay down the liability.
The PEIA cap would balance the state budget "on the backs" of retirees, Lee said.
If inflation drove up medical costs by 10 percent and increases in state and local government employer subsidies of retiree premiums were capped at 3 percent, retirees would be left to pay the remaining 7 percent, Lee reasoned.
Judy Hale, president of the state chapter of the American Federation of Teachers, also encouraged board members to wait on the Legislature.
"We all know that 3 percent is not enough. We all know what medical inflation is," she said.
Board member Elaine Harris, who works for the Communication Workers of America union, made a motion to amend the 3 percent limit. Member Joshua Sword, who works for the West Virginia Federation of Teachers, seconded that motion. Harris and Sword were the only board members to vote for that motion, however.
Robert Ferguson, cabinet secretary for the Department of Administration and chairman of the PEIA board, said the move was too important to wait on lawmakers.
"To not act on this today, I don't think it's the prudent thing to do. If the Legislature doesn't do anything, we'd have ourselves a problem," he said.