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West Virginia PEIA considering smaller premium increases, larger spousal surcharge

The PEIA Finance Board is considering much smaller premium increases for public employee health benefit plans next fiscal year. (File Photo)

CHARLESTON — After two years of back-to-back large premium hikes, public employees in West Virginia could see a substantially smaller premium increase for their health insurance benefits, though a spousal surcharge is expected to rise.

The finance board of the West Virginia Public Employees Insurance Agency (PEIA) met Thursday afternoon to tentatively approve a financial plan for fiscal year 2027 beginning on July 1, 2026. Final approval of the plan will occur in December after the finance board holds a series of public comment hearings across the state beginning in November.

“We’ve been primarily focused over the last few months on formulating our draft fiscal 2027 financial plan,” said PEIA Executive Director Brent Wolfingbarger. “That has required a lot of effort and thought and time.”

The FY27 PEIA financial plan proposal for both the state fund and non-state fund (county and city governments) would include a 3% aggregate premium increase for both employees and employers. That is far below the PEIA premium increases approved by the finance board more than 13 months ago that went into effect on July 1, including a 14% premium increase for state employees, a 16% increase for local government employees, and a 12% increase for public employee retirees.

A recent report conducted by BDO USA for the West Virginia Legislature placed the blame of previous substantial PEIA premium increases on a premium freeze put in place between 2018 and 2022 by former governor Jim Justice, combined with the passage of Senate Bill 268 in 2023, which returned PEIA to an 80/20 employer-employee match for state employees beginning in fiscal year 2025, with the employee/employer match going to 70/30 for out-of-state medical care for non-contiguous out-of-state counties.

“(BDO USA) noted that we had had some substantial premium increases the past few years, and that had been caused in large part to the fact that there were no premium increases from 2018 through 2022,” Wolfingbarger said. “You can see that there’s a much sharper, steep curve at the end of the period where we were required to increase premiums because we had failed to keep pace with rising premium levels.”

According to the new proposal, the average family-tier spousal surcharge would increase by $200 a month to comply with State Code, which requires the employee to pay the actuarial value of the plan, which varies from year to year. The current average spousal surcharge is $350 per month.

“That is a statutory requirement,” Wolfingbarger said. “Our agency is obligated to estimate what the actuarial value of the health care expenses that our employee spouses will incur and pass that on to the employees. That is not something that we have discretion over. It is something that is an obligation established for us in the code.”

Proposed non-Medicare and Medicare premium increases in the PEIA retiree fund are also being limited to 3%. There will also be an increase in retiree paygo from $10 million to $55 million, and a $30 million investment gain from fiscal year 2025 will go to the PEIA retiree premium stabilization fund.

The RHPT (Retiree Health Benefit Trust) is showing financial pressures in the future with assumed increases in the Medicare Advantage Prescription Drug, or MAP decapitations,” Wolfingbarger said.

“Unless changes are made, the retiree premium stabilization reserve will be depleted in fiscal year ’27 and other post-employment benefits – OPEB liability funding status – will be at 92%.

“We want to make sure that as these uncertainties on the federal level may kick in that we have flexibility to respond to those and we always take it on a year-by-year basis,” Wolfingbarger said. “So, that’s the glide path that we are seeking to pursue, and we can re-examine future years based on our experience in 2026.”

PEIA’s proposed FY27 financial plan would also convert Plan D into a low-premium high-deductible plan. Premiums in Plan D would decrease 34% with coinsurance going from 80% to 75%, but deductibles would increase by 425% and out-of-pocket expenses would increase by 55%.

As a result, the self-insured PPB plan names would change, with Plan A becoming PPB Gold, Plan B becoming PPB Silber, Plan C becoming PPB Gold High Deductible Plan, and Plan D becoming PPB WV Bronze High Deductible Plan.

Those choosing the PPB WV Bronze High Deductible Plan would receive a one-time $500

contribution to either a health savings account or as a health reimbursement arrangement from their employer. Employees would be able to make additional pre-tax contributions into their HAS during the fiscal year to offset their out-of-pocket expenses.

“We want to stress, this new bronze plan is totally voluntary,” Wolfingbarger said. “It’s open to anybody that wants to enter that and feels that it would be a better fit for their personal needs.”

Public hearings for the FY27 PEIA financial plan are scheduled for:

*Monday, Nov. 3, at The Highlands Event Center in Wheeling

*Thursday, Nov. 6, at the Beckley-Raleigh Convention Center

*Monday, Nov. 10, at the Holiday Inn Martinsburg

*Thursday, Nov. 13, at the West Virginia Culture Center in Charleston

*Monday, Nov. 17, at the Mountainlair Student Union – Gold Ballroom in Morgantown

Registration for all the public hearings begins at 5:30 p.m., with the hearings beginning at 6 p.m. There will also be a virtual public hearing on Thursday, Nov. 20. Information on the public hearings can be found at peia.wv.gov.

Steven Allen Adams can be reached at sadams@newsandsentinel.com

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FY27 PEIA Public Hearing Schedule

* Monday, Nov. 3, at The Highlands Event Center in Wheeling

* Thursday, Nov. 6, at the Beckley-Raleigh Convention Center

* Monday, Nov. 10, at the Holiday Inn Martinsburg

* Thursday, Nov. 13, at the West Virginia Culture Center in Charleston

* Monday, Nov. 17, at the Mountainlair Student Union – Gold Ballroom in Morgantown

Registration for all the public hearings begins at 5:30 p.m., with the hearings beginning at 6 p.m. There will also be a virtual public hearing on Thursday, Nov. 20. Information on the public hearings can be found at peia.wv.gov.

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