By Autumn Shelton, RealWV

CHARLESTON, W.Va. – The Public Employees Insurance Agency (PEIA) Finance Board held their final public hearing on Thursday regarding increased costs and plan changes for fiscal year 2027. And, although major concerns were expressed surrounding the financial stability of the state’s Retiree Health Benefit Trust Fund, they hope this proposed plan will stabilize it moving forward. 

But first, PEIA Director Brent Wolfinbarger discussed these proposed PEIA changes, and explained the reasons behind premium increases during this virtual hearing. 

“Over the course of the past year, the Legislature retained a consulting firm called BDO to do an in-depth analysis of PEIA to see what we were doing right, what we were doing wrong, and to make suggestions on how to improve our operations,” Wolfinbarger began. 

According to BDO’s analysis, despite the continual rise in healthcare costs, PEIA did not increase its insurance premiums from 2018 through 2022, which, Wolfinbarger said, “necessitated much larger premium increases in 2023 and 2024.” 

Another major concern centered around the need for a spousal surcharge, a requirement that states that spouses of a PEIA insured person may receive PEIA coverage. However, if they are offered health insurance through a separate employer-sponsored plan, they would have to pay an additional fee for PEIA coverage. The current spousal surcharge is approximately $350 per month. 

The spousal surcharge was set forth by the West Virginia Legislature through Senate Bill 268 back in 2023 and became law on July 1 of that same year. This bill also set forth a prior increase in PEIA premiums to return to an 80/20 employer/employee split. 

“PEIA does not have any discretion to do away with the spousal surcharge,” Wolfinbarger stated. 

Additionally, Wolfinbarger explained the uncertain financial stability of the state’s Retiree Health Benefit Trust Fund, which was created by the Legislature in 2006 to provide and administer retiree post-employment health care benefits. 

“It’s been showing financial pressures in the future with assumed increases in the Medicare Advantage Prescription Drug, or MAPD capitations. And, unless changes are made, the Retiree’s Premium Stabilization Reserve (PSR) would be depleted in fiscal year 2027,” Wolfinbarger said. “And, the Other Post-Employment Benefits, or OPEB liability, funding status would be at 92%.” 

The PEIA board’s proposed plan should extend the PSR to fiscal year 2028, and create a rise in OPEB liability from 95.4% at the end of 2026 to 113.9% by the end of 2030, Wolfinbarger stated, calling that a “substantial increase in its long-term financial stability.” 

“We’re also proposing to increase the Pay-Go premium payments from the PEIA’s active fund to the retiree trust,” Wolfinbarger continued. “And by doing so, the fiscal year 2027 plan would reduce the premium increases that otherwise would have been imposed on retirees to cover the trust’s projected higher cost.” 

He said that if this situation wasn’t addressed, premiums for retirees would have “almost doubled.” 

“I believe we took some pretty bold action to try to make sure our retirees are taken care of,” Wolfinbarger said. 

Taking all of this into consideration, Wolfinbarger said that the proposed PEIA board decisions for the state fund in fiscal year 2027 include: 

• A 3% aggregate premium increase for both employees and state agency employers
• An average Family Tier Spousal Surcharge increase of $200
• Changing PEIA Plan D to a lower value plan, meaning premiums will decrease 34%, coinsurance will go from 80% to 75%, the deductible will increase 425%, and the maximum out of pocket cost will increase 55%.
• An Employer Administrative Fee increase of $2.50.

Additionally, following a standard set by the Affordable Care Act for easier to understand “metal inspired” tier rates, PEIA self-insured PPB plans will be renamed. PPB Plan A will be named PPB Gold, PPB Plan C will be named PPB Gold High Deductible Plan, PPB Plan B will be named PPB Silver, and PPB Plan D will be named PPB WV Bronze High Deductible Plan.

PEIA board decisions for the retiree fund in fiscal year 2027 include: 

• A Non-Medicare premium increase of 3%
• A Medicare premium increase of 3%
• An increase in retiree Pay-Go from $10 million to $55 million 
• The designation of $30 million of fiscal year 2025 investment gain as retiree premium stabilization reserve. 

PEIA board decisions for the non-state fund in fiscal year 2027 include:

• A 50% Participation Standard
• An increase in Plan C premiums, deductibles and maximum out of pocket by 5%
• An adjustment of non-state coverage tiers deductibles and maximum out of pocket and/or premiums by 5%. (The Employee/Child(ren) tier will decrease approximately 5%, and the family tier will increase approximately 5% to cover higher claim costs). 

After the discussion on the proposed changes, Dale Lee, co-president of Education West Virginia, was the first to speak during the public hearing. 

Lee began by thanking members of the PEIA board for their work, and noted that the “anger and frustration” experienced by many toward PEIA premium increases should not be directed at the board. Instead, Lee said that those frustrations should be directed toward the state’s legislators and governor. 

“The Legislature controls the funding and the statutory requirements for the plan,” Lee said, adding that state lawmakers should consider making the spousal surcharge tiered, depending on income level, pass a pay increase, and provide a cost of living pay increase to the state’s retirees during the upcoming legislative session. 

“Our retirees gave their lives to the students of West Virginia and the people of West Virginia. It is now time to show them respect and appreciation,” Lee said. “To our legislators out there, I’m asking you to do something to help our retirees.” 

After hearing from residents who had concerns with PEIA premium increases, as well as their own personal financial stability due to rising healthcare costs, Delegate David Green, R-McDowell, provided his comments at the end of the public hearing.

Green stated that he understands the frustration, but there is only so much money available in a state with a declining population. 

“I could go through a plethora of things that we need to have money for, but there’s only so much blood you can squeeze out of a turnip,” Green said. “So, that’s not an excuse for us, throwing up our hands and saying we’re not going to do anything. What we have to do is the hard work to go and make it to where businesses want to come back to West Virginia. To make it where our children want to stay in West Virginia.” 

From his understanding, Green said that the upcoming legislative session will focus on ways to bring revenue back into the state. 

The PEIA board will make their final decision regarding PEIA plan updates and changes during their next meeting in December.