PEIA board reverses course, will not raise public employee health insurance costs
CHARLESTON, W.Va. -- State employees' health insurance costs will not increase next year, thanks to a last-minute, $4 million shot in the arm from Gov. Earl Ray Tomblin.
The Public Employees Insurance Agency finance board agreed to use an additional $4 million in next year's budget to delay cost increases previously recommended by the agency for 2014.
Members also voted to keep drug co-payment rates the same.
Though health insurance premiums were not on the table this year, prior to Thursday's meeting PEIA officials planned to recommend an increase in some employees' maximum out-of-pocket expenses in the budget year that starts next summer.
The governor's office notified the agency before the meeting, however, that PEIA would receive an additional $4 million in funding next year to prevent those costs from increasing.
PEIA families' out-of-pocket expenses currently are limited to one and a half times those of single employees. Single employees making $30,000 a year, for instance, pay a maximum of $1,250 for health services each year. Families of employees who make $30,000, meanwhile, pay $1,875 in out-of-pocket costs.
PEIA had planned to increase families' maximum out-of-pocket expenses to twice a single employee's limit. Instead of paying $1,875 each year, families making $30,000 a year would now pay $2,500.
PEIA director Ted Cheatham said the change would have brought PEIA's out-of-pocket limits closer to those of private insurance companies, saving the agency $4 million over the next year.
But the governor on Thursday told PEIA it would receive an extra $4 million in next year's budget to prevent the cost increases.
"I think the governor was courageous," board member Joshua Sword said. "I think he did that because he wanted to take care of public employees."
Sword, the political director for the American Federation of Teachers' West Virginia chapter, then suggested the finance board also delay changes to its drug coverage plan.
PEIA officials had suggested the agency increase co-payments from $50 for a 30-day supply to $85 per 30-day supply for generic and "preferred brand" drugs, or $100 per month for non-preferred brand specialty drugs.
Cheatham said that change would have saved PEIA $500,000 next year.
Sword asked Dave Bond, the agency's actuary, if it could absorb that $500,000 in next year's budget.
"Is there enough cash where we could get by with at least postponing this benefit change?" he asked.
"So far, keep our fingers crossed, we're looking pretty good. The answer's yes," Bond responded.
Finance board members unanimously agreed to use its extra $4 million to keep out-of-pocket limits the same and to absorb the $500,000 cost of keeping drug co-payments the same.
AFT-WV president-elect Christine Campbell released a statement about the finance board vote on Thursday evening.
"For the first time in many years, public employees will have no PEIA premium increases or take backs in benefits. This is a tremendous victory for public employees," she said in the release.