Senate Moves Budget, PEIA, Pay Raises In Saturday Session

The Senate returned Saturday afternoon at 1:45 p.m. after a brief recess to pass several important bills including tax cuts, pay raises for state employees and a budget.

With a compromise on tax cuts seemingly solidified with the passage of House Bill 2526, the Senate was able to pass Senate Bill 150 Saturday afternoon after suspending rules to advance it to third reading.

Senate Finance Committee Chair Sen. Eric Tarr, R-Putnam, said total appropriations in the budget would be just over $20 billion. He highlighted several changes to the budget’s original version, including changes made to reflect the dissolution of the Department of Health and Human Resources.

“Each of the state hospitals are broken out into their own budget item,” Tarr said. “This is the first step of many that will begin to separate DHHR into three entities.”

Tarr went on to say that the separation of DHHR’s budget into distinct items is part of a larger push for increased transparency into the department’s – or its successor’s – budgets, by far the largest single portion of the budget each year.

“Instead of seeing just a few pages for a $7 billion budget, we can actually see if they’re getting the money for what the state appropriates it for,” Tarr said.

Tarr also highlighted the appropriations for the Public Employee Insurance Agency pursuant to the completion of Senate Bill 268.

“There’s $49 million in increased reimbursement to health care providers so that we don’t have hospitals saying they don’t accept PEIA,” he said. “It also takes the plan to 80/20 so that it’s solvent for our foreseeable future.”

Tarr referred to the announcement by WVU-Wheeling Hospital just before the start of the legislative session that it would no longer accept PEIA patients starting in July due to its low reimbursement rates.

 He also pointed towards more than $30 million in the budget for the implementation of the Third Grade Success Act, as well as money to address deferred maintenance in higher education and state corrections.

The budget would increase appropriations for the Department of Economic Development from $600 million to $900 million and sets aside $10 million for grant raises to go to Emergency Medical Service personnel as well as $50 million to have a National Cancer Institute in West Virginia.

“We have one of the highest incidences of cancer per capita in the United States,” Tarr said. “That National Cancer Institute allows for research into cancer so those patients who are having failed treatments…they now have a means to go get research medicine and get it in research programs with medicine given to them free of charge.”

Tarr ended his summary of the budget by emphasizing spending on dams.

“We’re finally getting a start on taking care of dams in West Virginia that are literally falling apart,” he said. “By doing that we’re gonna save community upon community from damage by floodwaters.”

Big Changes To PEIA

The longest debate of the afternoon surrounded Senate Bill 268, which aims to address the insolvency of PEIA.

Premiums for PEIA members have not been raised since 2012, and the agency currently only reimburses providers at half of the Medicare rate. On the first day of the session, the Senate passed Senate Bill 127 to increase the reimbursement of hospital rates to 110 percent of Medicare.

Senate Majority Leader Tom Takubo, R-Kanawha, explained the bill. He noted that the bill mandates what is known as an 80/20 split for costs between PEIA and employees. He also explained:

• The bill removes a cap placed on the annual maximum benefit for Applied Behavioral Analysis.
• The bill rearranges mandated benefits placed in other sections of the bill. These benefits included the section that relates to coverage for vaccinations, contraceptives, and group life insurance.
• The Group Life Insurance language was amended to reflect that the group life and accidental death insurance is in the amount of 10,000 for every employee, but still allows you to get additional plans to them.
• The bill provides that health programs may be offered in addition to existing language that provides PEIA may have wellness programs.
• These programs are voluntary and for the participants and separate from any medical benefit.
• The bill provides PEIA shall use networks to provide care to its members out of state.
• The bill provides that an employee spouse that has health insurance available through another employee, then the employer may not cover any portion of the premiums for the employee spouse coverage unless the employee adds his or her spouse to his or her coverage by paying the cost of the actuarial value of the plan provided that this does not apply to spouses of retired employees. 

Sen. Mike Caputo, D-Marion, raised a number of issues, including raises to employee premiums.

“What about the premium increases for each salary tier? As I understand, it can be 14 percent to 26 percent. Is that correct? And how’s that number determined?” he said.

Takubo explained that a higher salary individual with the more expensive plan with family coverage might see a 24 percent increase. He explained the $2,300 pay increase would help buffer the increase.

Caputo ended his statement by expressing concern for retirees on PEIA.

“I’m deeply concerned about the plan participants but I’m more deeply concerned about the retirees,” he said. “We did a little bit for those on the lower tier, but my concerns are this is going to put a huge burden on the folks that serviced the state for so, so many years for so little pay. And now the benefits are even going to be less and less.”

Senate Bill 268 passed on a vote of 29 to four. Caputo was joined in dissent by fellow Democrat Sen. Mike Woelfel, D – Cabell, as well as Sen. Laura Chapman, R-Ohio and Sen. Mike Stuart, R-Kanawha.

Gov. Jim Justice has previously pledged that there would be no PEIA premium increases while he was in office so it is unclear how he will react to the bill. One reason West Virginia teachers went on strike in 2018 and 2019 was proposed hikes to PEIA premiums. 

Pay Raises For Some

Senate Bill 423 would allow for a $2,300 across the board pay increase for certain public state employees.

Those eligible for the raise include public school employees as well as employees with the State Police. 

A pay increase for other state employees would be subject to the appropriations in the state budget. 

Senator Mike Caputo, D-Marion, expressed concern to Finance Committee Chair Eric Tarr, R-Putnam, that the pay raise would not benefit all state employees. Caputo said he had received calls in the past from Department of Highway workers whose salaries are not in the code.

“Do you feel confident that every state employee will get a $2,300 across the board raise whether they are a teacher, or whether they drive the snowplow truck?” Caputo asked.

Tarr responded he was confident that every state employee would receive a pay raise. 

“Those agencies… it’s up to them, whether they decide they go up to $2300 because that is not what this law contemplates. The bill before you contemplates a $2,300 pay raise for state employees whose salary is set in the pay schedule and state code,” Tarr said.

Caputo further pressed Tarr for an answer to his question.

“I just want to make sure that everybody believes that there’s money out there for everybody to get a pay raise,” Caputo emphasized.

“We have provided the spending authority in the budget. It’s up to the governor for anybody that’s not a general revenue. When’s the last time we gave a pay raise that didn’t happen?” Tarr responded.