CHARLESTON, W.Va. — Gov. Jim Justice promised to adjust the salary tiers for the Public Employees Insurance Agency so state workers who just received raises won’t lose the extra money by being bumped into a higher insurance bracket.
PEIA is unique in that it is based on ability to pay, with 10 salary tiers throughout the system.
Justice on Monday said he is asking the PEIA Finance Board to increase the tiers by $2,700 — a move to help 14,000 state workers who would have been bumped up into a higher-priced insurance tier based on their salary increases.
“Again, I promised these people, didn’t I?” Justice said. “I promised these people their costs wouldn’t go up.”
PEIA’s plan for the coming fiscal year was frozen after teachers went on a statewide strike over complaints that insurance costs were going up faster than their pay could absorb. State workers received on average 5 percent raises after the nine-day strike that stretched from February to March during the recent legislative session.
This would be a fix to address an unintended consequence of the raises.
The PEIA Task Force could take action when it meets Thursday.
Though he called Monday’s news conference to discuss PEIA, Justice didn’t reach that topic in the opening 15 minutes. He first advised reporters to provide more positive coverage about the state and revisited complaints that he chooses to live in Greenbrier County rather than at the seat of state government as the West Virginia constitution specifies.
The governor said he saves the state money by not requiring housekeeping to make his bed, clean his laundry or prepare meals. All of this was spelled out on whiteboards wheeled out for the occasion.
As Justice finally began talking about PEIA, he brought up the agency’s director, Ted Cheatham, along with West Virginia Education Association President Dale Lee.
Justice promised long-term results on stabilizing PEIA costs.
“We can win this battle on PEIA to where we solve another issue,” Justice said. “And you know why we’re solving that issue? Nobody will be buying me toothpaste or cleaning my whatever, and nobody will be driving me around either. But we’ll be solving it.”
Lee said the concern for educators was that pay raises would be eaten up by being bumped into a different tier in PEIA premiums.
“We wanted to ensure that wasn’t going to happen, so the governor has called for the increase of $2,700 per tier so that no one should see their premiums go up or their out-of-pocket go up by bumping into the different tier just because of the pay raise,” Lee said.
Lee said that concern was raised over and over during public hearings on PEIA all over the state.
How people were affected depended on which bracket they would have been bumped into. Some would have experienced as much as a 25-percent increase in their premiums, Lee said.
“We wanted to make sure they received the entire raise, not have part of it go back into insurance premiums,” Lee said.
Cheatham described the change as revenue-neutral because of the freeze already in effect. He referenced the $29 million that was allocated for the freeze for the coming fiscal year.
“I’m estimating it to be net revenue-neutral,” Cheatham said. “It may cost us a little money because I believe some people may not get as large a raise and may actually drop a tier. But I don’t think that’s significant at all. I mean, it’s very doable, what the governor is trying to accomplish.”
Senate President Mitch Carmichael, who was in the audience at the news conference, praised the change in tiers but disputed the revenue-neutral characterization.
“This is another benefit for the teachers and the public employees of West Virginia. Under no circumstances now will anyone pay an increased premium for their health insurance or their prescription benefit in West Virginia, public employees or teachers,” said Carmichael, R-Jackson.
He continued, “It does cost money. It’s about a $7 million to $8 million investment because there were roughly 14,000 employees who were going to go into another tier. That tier increase would have been about $50 a month for additional healthcare premiums but your raise is over $200 a month.”