PEIA Board Approves $120 Million in Cuts for Second Time

Mar 30, 2016

Health insurance could become more expensive for some 230,000 West Virginians after the state Public Employees Insurance Agency, or PEIA, Finance Board voted unanimously to reinstate benefit cuts.

Board members had initially approved the cuts in December, but were assured by lawmakers that the program would receive more funding during this year's legislative session.

When lawmakers told PEIA customers they would provide additional funds to offset the $120 million in benefit cuts, approved by the finance board in December, they weren't exactly lying. Both the House and Senate approved budgets that included the extra funding. The problem is: both chambers approved different versions of that budget and then left town without first coming to an agreement, leaving West Virginia without a funding bill for Fiscal Year 2017.

On Wednesday, the PEIA Finance Board met to reconsider the health care plans available to state employees in the upcoming year.

Some expressed dissatisfaction with the legislature's inability to pass a budget thus far. Elaine Harris, who represents labor on the board, said she felt backed into a corner like there was nothing else board members could do but vote for benefit reductions.

Mary Jane Pickens, who chairs the board, said she thinks the board has been placed in a difficult position.

"I think we do have good leadership. But I think there's a lot of challenges around the budget this year that have placed the board, that have really limited the decision or did the choices of this board can make,” said Pickens.

The $120 million in cuts means more money will come out of the pockets of not just state employees, but also retirees. But the board approved the changes with the understanding that should lawmakers approve a budget that increases PEIA funding in the next year they can come back and rework the plans.

PEIA Director Ted Cheatham said the timeline does get tricky, though. If a budget with increased funding isn't approved by the first week in June, there could be a lapse in the payment of claims.

“I need 30 days to make it operational to pay a claim, so I'm going to have to shut the plant down and say 'Look I can't pay claims so I get the system right,'” said Cheatham. “It doesn't mean you can't go to the doctor. Doesn't mean you can't go to the pharmacy. It means you have to pay cash or the doctor will just take your co-pay and bill us later and we'll pay later.

At the statehouse, Governor Tomblin said talks are still ongoing with legislative leaders over a solution for the state's budgetary issues. He's hopeful they can have something in place by early June.

"I feel very confident that we should have some sort of agree but otherwise if we just have to go in and make that it's going to be disastrous for the people who depend on state services," said Tomblin.

House Speaker Tim Armstead and Senate President Bill Cole released a joint statement last week calling the PEIA board meeting and a vote "unnecessary" because lawmakers are fully committed to funding the program at increased levels to avoid the cuts but under PEIA rules, the board has to approve a health plan that is financially viable with the funding it has available when open enrollment begins Saturday.