A look inside what happened with PEIA in West Virginia

Teachers rally at Capitol in Charleston for better pay and for lawmakers to fix PEIA (WCHS, WVAH)

West Virginia's Public Employees Insurance Agency, known as PEIA, has become an issue of heated debate during the current legislative session. So, the Eyewitness News iTeam took a closer look at what exactly PEIA is and why it is so important to the state.

While the general public may see West Virginia as a government entity, it IS an employer and like any large employer, the state offers health insurance to its employees. So, the state Public Employees Insurance Agency is an insurance program the state offers its employees. A former PEIA Finance Board member gives us some historical perspective of how PEIA operates and how it got to this point.

For the past several days, teachers have been rallying for not only better pay, but for state lawmakers to fix the Public Employees Insurance Agency. The health plan, however, affects more than just teachers. It affects more than 200,000 employees.

“It covers state employees, higher education employees and their retirees, plus some county and city governments,” said Perry Bryant, a former PEIA Finance Board member who is now retired.

Right now, that health insurance plan is listed in poor health. For fiscal year 2019, PEIA is a $950 million insurance plan. That is how much the state needs to cover its 200-thousand-plus employees’ health care.

“You have a 5 or 6 percent rate of inflation, which for health care is not out of line with what you see with a Blue Cross/Blue Shield, that would require about $50 million to $60 million a year just to keep even. When they appropriate only an additional $10 million, you’ve got $40 million to $50 million worth of harm that you’re going to have to pass on to employees.”

That ‘harm’ translates into what teachers say is happening: steep increases in co-pays, out-of-pocket maximums for medical care, as well as major increases in prescription drug costs – all while their pay remains stagnant.

For teachers, it’s a flashback to what could happen again if nothing is done to fix PEIA.

“PEIA was in dire circumstances at that point” Bryant said. “It was one of the issues that led up to the 1990 teachers strike when the insurance card was not being accepted by even in-state hospitals and doctors, much less out-of-state hospitals and doctors.”

Conditions boiled over into the state’s first statewide teachers strike just as Governor Gaston Caperton took office.

To resolve future PEIA shortfalls, Caperton created the PEIA Finance Board to look at projected health care costs and set rates. The information is sent to the governor. A plan is then sent to the legislature for final approval.

But Bryant said in many years a lower amount was appropriated, or in some years, none at all.

“The issues of PEIA has everything to do with the legislature,” Bryant said. “If they appropriate 20 percent of what’s needed to keep up with the cost of inflation, that 80 percent of additional cost are going to be shifted to employees. And that’s what you’ve seen, particularly with stagnant wages. You’ve seen this erosion of the health insurance program because the legislature has not appropriated adequate monies for PEIA. That is the problem.”

Bryant said the state, as an employer, has an obligation to offer health insurance as part of its compensation package, just like any other employer would if they want to attract and retain high quality employees.

As for finding a permanent fix to PEIA, Bryant said it is possible to find a steady stream, but it will take a heavy lift. In other words, it will take a lot of legislative and gubernatorial leadership to get there.

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