Justice Proposes State Employee Pay Raise To Offset PEIA Premium Increases

West Virginia’s Public Employee Insurance Agency (PEIA) began soliciting public input this week on a proposed 10.5 percent insurance premium increase needed to meet expenses. 

That proposed rate hike comes on top of a legislated 24 percent premium increase passed in the 2023 legislative general session. PEIA was facing a long range shortfall of about $400 million by 2027 unless the funding mechanisms were changed. 

In his weekly media briefing. Gov. Jim Justice said that a proposed 5 percent pay raise for state employees and teachers would offset the higher premium.

“The increases are very difficult to avoid,” Justice said. “We can offset with pay raises to where we’ll be putting at least as much money in somebody’s pocket that the increase is going to cost, and in most cases, we’re putting more money in their pockets.”

A response to Justice’s PEIA offset from the West Virginia Democratic Party notes that in October 2021, Justice said PEIA premiums “would not go up on his watch.”  

In the response, West Virginia Democratic Party Chair Del. Mike Pushkin, D-Kanawha, noted what he called broken promises. 

“Sixteen months after the governor’s promise,” Pushkin said. “Apparently a meteorite hit the earth because the legislature passed a PEIA plan including an increase in premiums of 69 percent over five years. That very same week the legislature added insult to injury; rewarding themselves by passing a bill increasing their own pay.” 

PEIA’s five-year plan shows additional premium increases of 69 percent if the proposed changes are approved. 

West Virginia Education Association President Dale Lee said while the pay raise proposal offsets premium hikes for now, five year projections are concerning.

‘I don’t know anyone that can sustain that,” Lee said. “I don’t know, any private plan that would see a 69 percent premium increase over five years.”  

Lee said the answer is working on language regarding the mandated 80-20 premium share between employer and workers – along with savings plans. 

“The state puts no less than 80 percent and the employee should pay no more than 20 percent,” Lee said. “Any cost savings to the plan should be credited toward the employee share, because employees are the ones that are helping to create those cost savings. If you have to pay the spouse coverage, the spouse penalty, you actually are making less money right now than you made the year before. Those are all the issues that have to be looked at and be resolved.”

In 2018, West Virginia teachers went on strike with concerns over pay and PEIA. At the time, teachers went back to work after the governor agreed to form a PEIA Task Force to find solutions to avoid problems like this in the future.

PEIA Public Hearings continue through next week. The PEIA Finance Board is expected to vote on the proposed changes in December.