PEIA proposes premium increases ranging from slight to significant

CHARLESTON, W.Va. — West Virginia government and public school employees covered by Public Employees Insurance Agency health insurance can anticipate one-half percent across-the-board premium increases — with more substantial hikes for many employees — along with changes in pharmaceutical coverage, under a proposed 2018-19 benefits plan.

However, the plan proposes some significant fundamental changes to PEIA, including shrinking the 10 salary-based premium tiers to three tiers, and including the spouse’s income to determine premium tier, if the spouse is covered by PEIA.

“There are some winners and there are some losers under this environment,” PEIA Executive Director Ted Cheatham said of the proposed benefits package. “The goal here is to take this out, saying this is the concept, and to ask for feedback from the public.”

Retirees and nonstate employees covered by PEIA would see 2 percent premium increases.

West Virginia Education Association President Dale Lee is critical of the plan, saying annual drip, drip, drip in benefit cuts is taking a toll on state and public school employees, and on retirees.

“We used to say, ‘We know your salary is low, but your benefits are good,’ ” he said, “but each year, the benefits continue to erode.”

That combination is a key reason why there are more than 1,700 classroom teacher vacancies statewide, Lee said.

“When you can make anywhere from $5,000 to $20,000 more by driving half an hour across our borders … you’re not going to stay in West Virginia,” he said.

“I’m also concerned with our retirees, many of whom have been on a fixed income for a long, long time,” Lee added. “We continue to increase their costs with a 2 percent premium increase.”

As health insurance plans go, PEIA is unusual, in that premiums are based on salary, and Cheatham has long advocated using family income to determine premiums, saying PEIA subsidizes many high-paid private-sector professionals who are on their spouse’s PEIA coverage.

Under the proposal, PEIA insurees who have their spouses on their coverage would automatically jump to the highest premium tier and would have the option of submitting income tax records to show that their adjusted gross income is below the maximum.

Another key change would shift family coverage from a flat premium to a “pay by person” structure, with additional charges for spouses and dependent children.

For example, the current monthly premium for standard family coverage for an employee making $35,000 is $281.

If that employee has a spouse and three children, under the proposal, the new premium would be at least $363 a month, and could be as high as $446 a month, if the spouse has a higher income.

Similarly, the proposal would eliminate pharmacy deductibles but change preferred brand co-pays from $25 to $30 per 30-day prescription to 30 percent of cost, with a $100 maximum per 30-day prescription.

Cheatham said the 30 percent co-pay will give impetus to insurees to ask their physicians for generics or lower-cost equivalents to brand-name prescriptions.

“We want people to shop for drugs, and to get the most efficient drugs,” he said.

The proposal also expands PEIA’s Healthy Tomorrows wellness program. Under that plan, insurees who are not within acceptable ranges for basic health measures, such as blood pressure, blood sugar and total cholesterol, will have to pay a $500 penalty deductible and an additional $25 a month in premiums beginning July 1, 2018.

Beginning with the next plan year, Cheatham said, Healthy Tomorrows will switch to a points system, with points awarded for meeting the acceptable basic health ranges, as well as for participating in various healthy-lifestyle activities, such as logging 3,000 steps a day, participating in sports leagues, getting vision and dental checkups, among a long list of options.

In addition to earning enough points to avoid higher premiums and deductibles, insurees who meet points goals will be eligible for gift cards and other benefits, Cheatham said.

Previously, Cheatham had said PEIA needed to close about a $50 million shortfall in the 2018-19 plan year, but the Governor’s Office notified PEIA that it will provide an additional $10 million in the budget for employer premiums, while PEIA also will use $11 million that otherwise would have been transferred to the retirees’ trust fund.

The plan will go out for public hearings Nov. 6 in Morgantown, Nov. 7 in Martinsburg, Nov. 14 in Beckley and Nov. 15 in Charleston, with the Charleston meeting moving from its usual location at the Civic Center Little Theater to the University of Charleston.

PEIA also will host a statewide public hearing by teleconference on Nov. 13.

Cheatham initially proposed reducing what traditionally has been six public hearings to three, eliminating hearings in Wheeling, Huntington and Martinsburg, while adding two teleconferences, to reduce travel costs.

Finance Board members, however, decided to restore the public hearing in Martinsburg, given the comparatively long travel distance to the next-closest hearing location in Morgantown, and because no current board members are from the Eastern Panhandle.

The board will meet again Dec. 7, to make any changes and take a final vote to approve the 2018-19 plan.