Caelan Bailey Published

Legislature Votes To Restore PEIA Reserve

House bill screen reading SB 2009
Both chambers voted to approve restoring PEIA's reserve fund.
Perry Bennett/Legislative Photography
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Both chambers have now passed a bill to restore $87 million into a Public Employees Insurance Agency reserve fund.

After unanticipated healthcare plan costs this year, PEIA is short on a required reserve fund, money the insurance company must have on hand to operate. The deficit comes after PEIA had a projected $80 million in planned expense losses, according to Deputy Secretary for the Department of Revenue Mike Muchow speaking at the Joint Committee on Finance this morning.

Muchow explained that PEIA spent more on covering those in the state healthcare program than planned, with increased prescription weight loss drugs driving half of the jump along with high specialty and outpatient care expenses.

Recent PEIA premium increases went into effect in July: 10% for those who opt into the state insurance fund, and 14% for those that opt into PEIA.

The current allocation is a one-time amount, avoiding an unprecedented additional premium hike Jan. 1. But it doesn’t solve long-term coverage cost issues. PEIA does still plan to raise premiums in the next fiscal year, citing rising healthcare costs nationally. The organization’s board will meet Tuesday at 1 p.m. to discuss specific cost-cutting measures.

PEIA covers about 13% of West Virginians, including many legislators and employees at WVPB.