CHARLESTON — Union leaders Friday urged lawmakers to slow down on legislation that would affect insurance premiums for public employees.
Senate Bill 268 seeks to bolster the struggling Public Employees Insurance Agency by setting the reimbursement rate for hospitals at 110% of Medicare rate and returning the plan to an 80-20 employer-employee cost-share rate.
Prior to the legislative session, Wheeling Hospital announced it would no longer accept PEIA coverage after July 1 due to poor reimbursement rates, leading to fears that other hospitals would follow suit and leaving lawmakers scrambling to find solutions.
But union representatives who gathered Friday in front of the House of Delegates chamber said the bill being offered up to solve the problem creates too-large an increase in premiums for policyholders, removes coverage for spouses, and jeopardizes coverage for non-state employees who participate in PEIA.
“Right now the plan is designed, in their mind, to address the solvency of PEIA by reducing benefits on the plan participants and kicking people off the plan, as opposed to finding and directing a dedicated revenue stream,” said Josh Sword, president of WV AFL-CIO.
Sword said he hopes more ideas will be offered in the House of Delegates, where the bill is set for final approval Saturday, than were offered in the Senate.
“I think the surplus is a good place to start. We’re swimming in money down here. There is absolutely no excuse for this in this year. We can make it right. Get all the stakeholders in the room. Have some honest dialogue. If we can get them to that point, we can come up with a solution that we can all buy in on, I have no doubt,” Sword said.
In addition to a 26% increase in premiums, union officials were concerned about changes to spousal coverage in the proposed bill. Spouses of public employees who have their own insurance options through an employer would have to buy into PEIA coverage at the actuarial cost of the plan, which would be about $147, according to testimony this week in the House Finance Committee.
This “marriage penalty,” when added to the cost of returning to an 80-20 cost-share, could mean major out-of-pocket expenses for PEIA members, despite a $2,300 salary increase for state workers that is also currently under consideration by the Legislature, union leaders said. Sword said the pay raise would have to be “north of $3,000” to offset the increases proposed in SB 268.
When the marriage penalty and premium increase are combined, PEIA members could see their out-of-pocket costs nearly double, driving yearly costs to amounts well over $2,300, said Elaine Harris, spokeswoman for Communications Workers of America.
“I have some real examples, not the fuzzy math that’s been put before you in discussions here in both chambers,” Harris said.
The bill would make recruiting more difficult in a climate where almost every state agency is short-staffed and overworked, Harris said.
“We need them to take a look. As has often been said, the old adage is: If you’re not at the table, you’re on the menu. Let me tell you, these folks are very much on the menu, and we need to see what can be done to help this overall situation,” Harris said.
The bill directs PEIA to conduct an independent study of the financial solvency of the plan, which would include options regarding continued non-state employee participation, collapsing salary levels, and any other cost-saving measures, according to the bill.
The bill requires the agency to seek input from public employees, retirees, providers, and other interested parties on proposed solutions to evaluate in the study, which would begin July 1, 2023, and would be presented to the Joint Committee on Government and Finance by July 1, 2024.
Recently retired Charleston Fire Department Capt. Myron Boggess, president of the Professional Firefighters of West Virginia, was concerned about the implications of the proposed study for the 32,000 non-state employees who participate in PEIA, which includes police officers, firefighters, emergency medical workers, 911 dispatchers, sanitation workers, nurses, and others.
“We’ve had real concerns about losing access to PEIA benefits,” Boggess said.
Fred Albert, president of the American Federation of Teachers — West Virginia, a teacher’s union, said the state is attempting to fix PEIA on the backs of its members.
“Going forward to the year 2025, we’re looking at about a half-billion-dollar deficit in PEIA that, I suppose, will be supplied and furnished on the backs of hardworking dedicated public employees of West Virginia. That’s just not right,” Albert said.
West Virginia Education Association President Dale Lee said PEIA members expect an increase in premiums, but the one proposed SB 268 is not reasonable.
“We’ve known for years that our employees have to have skin in the game. But we have to do it in a reasonable way,” Lee said.