The Public Employees Insurance Agency’s financial board approved a plan for the coming fiscal year without rocking any boats, but the agency remains concerned about storms up ahead.
After taking next year’s financial plan to a series of stops around West Virginia for public comment, the board officially approved it today.
Next year’s plan would hold premium increases at zero for state employees. Retirees who receive PEIA benefits also would not experience a premium increase this coming year. There’s an exception for non-state participants, like local government organizations that opt in, whose plans would go up 9.7 percent.
But officials are watching economic trends for coming years when financial strain is more likely. Major factors include the demand on medical and pharmaceutical costs as well as performance of PEIA’s investments.
A five-year PEIA outlook released earlier this year anticipates keeping employee premium increases at zero through 2027. But costs to the state would go up exponentially over those years.
By 2027, the outlook anticipates, state government would have to transfer an additional $376.5 million in public funds to bolster the insurance program.
“We’re really in trouble in a few years. I mean, we’re facing some dire consequences in the next few years,” said Dale Lee, president of the West Virginia Education Association, addressing the board.
The pain of PEIA costs has been acute in West Virginia. In 2018, rising insurance premiums and flat pay prompted a statewide teachers strike.
Today, the PEIA board reviewed the agency’s financial performance early this fiscal year, through the first four months. PEIA Director Jason Haught described “cautiously good news.”
Similarly, the finance board looked ahead toward whether the coming fiscal year seems to be trending as anticipated. The trend isn’t great, but agency analysts said it could be worse.
“Overall, we’re looking at a $53 million loss, which is pretty close to what we had produced before,” said actuary Chris Borcik.
He assessed the overall picture as “some good news and bad news mixed in.”