PEIA reserve funds are projected to reach 25.6 percent of overall annual expenses by June 30, 2020, well above the 14 percent recommended reserve the agency attempts to maintain, creating an estimated $26.5 million surplus that PEIA will be able to put toward the 2020-21 plan year, executive director Ted Cheatham told the Joint Committee on Government and Finance Tuesday.
“We do have every intention to spend down both the state [employee] and non-state reserves,” he said.
That should help PEIA get through the 2021-22 plan year without needing additional general revenue funding, beyond continuing to spend down $105 million of 2018-19 budget surplus the Legislature transferred into a PEIA “rainy day” fund earlier this year.
PEIA, the state-managed health insurance plan for public school and state employees, as well as some municipal and county employees, is currently conducting public hearings on the proposed 2020-21 benefits plan, a plan that proposes no premium increases and no cuts in benefits for the plan year.
The PEIA Finance Committee is expected to approve the plan, which goes into effect July 1, 2020, in December.
Also during the Joint Committee meeting:
n Investment Management Board Executive Director Craig Slaughter advised state investments grew by 1.5 percent in September, bringing earnings for the 2019-20 budget year up to 1.0 percent.
And while October and early November have seen reasonably good returns, Slaughter advised, “The long run is that expectations should be muted for all returns.”
n State Insurance Commissioner James Dodrill said the commission is closely monitoring the Murray Energy bankruptcy to ensure the coal giant continues to pay Workers’ Compensation and other insurance premiums on its employees.
“There are mechanisms in place to make sure benefits owed to employees get paid,” he said.