Union leaders Friday urged West Virginia lawmakers to slow down on legislation that would affect insurance premiums for public employees.
Senate Bill 268 seeks to bolster the struggling Public Employees Insurance Agency by setting the reimbursement rate for hospitals at 110% of Medicare rate and returning the plan to an 80-20 employer-employee cost-share rate.
Before the legislative session, Wheeling Hospital announced that it no longer would accept PEIA coverage after July 1 because of poor reimbursement rates, leading to fears that other hospitals would follow suit. This left lawmakers scrambling to find solutions.
But union representatives who gathered Friday in front of the House of Delegates chamber said the bill being offered up to solve the problem creates too large an increase in premiums for policyholders, removes coverage for some spouses and jeopardizes coverage for nongovernment employees who participate in PEIA.
“Right now, the plan is designed, in their mind, to address the solvency of PEIA by reducing benefits on the plan participants and kicking people off the plan, as opposed to finding and directing a dedicated revenue stream,” said Josh Sword, president of the AFL-CIO of West Virginia.
Sword said he hopes more ideas will be offered in the House of Delegates, where the bill is set for final approval Saturday, than were offered in the Senate.
“I think the surplus is a good place to start. We’re swimming in money down here. There is absolutely no excuse for this in this year,” Sword said. “We can make it right. Get all the stakeholders in the room. Have some honest dialogue. If we can get them to that point, we can come up with a solution that we can all buy in on, I have no doubt.”
In addition to a 26% increase in premiums, union officials are concerned about changes to spousal coverage in the proposed bill. Spouses of public employees who have their own insurance options through an employer would have to buy into PEIA coverage at the actuarial cost of the plan, which would be about $147, according to testimony this week in the House Finance Committee.
Union leaders said this “marriage penalty,” when added to the cost of returning to an 80-20 cost-share, could mean major out-of-pocket expenses for PEIA members, despite a $2,300 salary increase for state workers that also is under consideration by the Legislature. Sword said the pay raise would have to be “north of $3,000” to offset the increases proposed in SB 268.
When the so-called marriage penalty and premium increase are combined, PEIA members could see their out-of-pocket costs nearly double, driving yearly costs to amounts well over $2,300, said Elaine Harris, spokeswoman for the Communications Workers of America.
“I have some real examples, not the fuzzy math that’s been put before you in discussions here in both chambers,” Harris said.
The bill would make recruiting more difficult in a climate where almost every state agency is short-staffed and overworked, she said.
“We need them to take a look,” Harris said. “As has often been said, the old adage is: If you’re not at the table, you’re on the menu. Let me tell you, these folks are very much on the menu, and we need to see what can be done to help this overall situation.”
The bill directs PEIA to conduct an independent study of the financial solvency of the plan, which would include options regarding continued nonstate employee participation, collapsing salary levels and any other cost-saving measures, according to the bill.
The measure requires the agency to seek input from public employees, retirees, providers and other interested parties on proposed solutions to evaluate in the study, which would begin July 1 of this year and be presented to the Joint Committee on Government and Finance by July 1, 2024.
Recently retired Charleston Fire Department Capt. Myron Boggess, president of the Professional Firefighters of West Virginia, said he is concerned about the implications of the proposed study for the 32,000 nonstate employees who participate in PEIA, which include police officers, firefighters, emergency medical workers, 911 dispatchers, sanitation workers and nurses.
“We’ve had real concerns about losing access to PEIA benefits,” Boggess said.
Fred Albert, president of the American Federation of Teachers — West Virginia union, said the state is attempting to fix PEIA on the backs of its members.
“Going forward to the year 2025, we’re looking at about a half-billion-dollar deficit in PEIA that, I suppose, will be supplied and furnished on the backs of hardworking dedicated public employees of West Virginia,” Albert said. “That’s just not right.”
West Virginia Education Association President Dale Lee said PEIA members expect an increase in premiums, but the one proposed SB 268 is not reasonable.
“We’ve known for years that our employees have to have skin in the game,” Lee said. “But we have to do it in a reasonable way.”