- Associated Press - Sunday, September 20, 2015

CHARLESTON, W.Va. (AP) - West Virginia public workers and retirees could face another round of health insurance benefit cuts.

The Public Employees Insurance Agency has to cut about $60 million for the 2016-2017 plan because state funding isn’t expected to increase, PEIA Executive Director Ted Cheatham said.

Cheatham told The Charleston Gazette-Mail (https://bit.ly/1LqCpSb) that PEIA staff will present a list of possible cuts to the agency’s Finance Board in October. Following statewide public hearings in November, the board will approve the 2016-2017 plan in December. The plan will go into effect July 1, 2016.

The PEIA had imposed $40 million in cuts for the current plan that went into effect July 1. Those cuts were achieved primarily through increasing deductibles and co-pays.

“We are, much like last year, developing plan options to meet the financial requirements to keep the plan solvent,” Cheatham said. “I anticipate us putting together a list of options again, much as we did before.”

The agency provides health insurance for employees of the state, public schools and other government entities.

“A lot of people have misconceptions about what PEIA is,” Cheatham said. “We’re state employees, too, and we’re on this plan, as well. Still, we have a fiscal responsibility to the taxpayers of the state.”

By law, PEIA can only increase premiums if the state increases the employers’ contributions, to maintain a requirement that 80 percent of premiums are paid by the employer and 20 percent by the employee.

Cheatham said he has been advised that the state government’s share of funding will remain at the current $422.4 million.

“We are not anticipating any more money,” he said, “and we are planning accordingly.”

Meanwhile, the cost of health care services continues to rise.

“I need $60 million a year to keep the plan where it is right now,” Cheatham said, adding, “We can’t sustain that rate of growth forever.”

Cheatham said the PEIA Finance Board no longer can dip into its reserve fund to avoid plan cuts or premium increases, as it did from 2012 through 2014.

“We agreed to stave off significant changes by slowly spending down that reserve,” he said. “That reserve now is gone. It’s at its statutory minimum.”

He said PEIA remains a good, affordable health insurance plan for most public employees and retirees, compared to national averages.

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Information from: The Charleston Gazette-Mail, https://wvgazettemail.com.


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