Making significant adjustments to their initial plan, the finance board of the West Virginia Public Employees Insurance Agency took a crucial step on Thursday. They signed off on approximately $113 million in premium and cost hikes for employees during the 2026 fiscal year. This decision has far-reaching implications for both state and local government employees.

Key Changes and Their Impact

Premiums for state employees will see a notable 14% increase, while local government employees will face a 16% rise. Additionally, premiums for retirees will go up by 12%. These increases will directly affect employees' out-of-pocket expenses. A monthly spousal surcharge for state employees will more than double, from $147 to $350. Moreover, both state and county employees using PEIA will witness a 40% increase in their out-of-pocket maximum and higher co-pays.The board's approval of two amendments to the original plan is also noteworthy. They decided against adopting two initial proposals - one that would have increased deductibles, out-of-pocket costs, and prescription drug copays for retirees eligible for a benefit assistance program, and the other that would have simplified the number of salary tiers from 10 to five.

Public Hearings and Their Influence

The board's decision follows a series of public hearings held across the state regarding the proposed increases. Brian Cunningham, the PEIA director, emphasized that the board wanted to maintain the assistance program benefit for retirees as rich as possible as they heard during the hearings that retirees are facing difficulties. Elaine Harris, an international staff representative with the Communications Workers of America, called for the agency to do more to inform retirees about the assistance program. She pointed out that some retirees who retired many years ago have never seen any increases in their retirement checks and need to be educated about this program.Eligibility for the assistance program is based on income. Retirees interested in learning more about the program and whether they qualify can call the agency at 304-558-7850 or 1-888-680-7342.

Cost Drivers and Legislative Changes

Rising health care costs, particularly inflation for prescription GLP-1 drugs used to treat obesity and diabetes, are a major factor driving the rate increases. These drugs accounted for $53 million in net costs for the agency last year. As a result, the agency suspended a pilot program that covered the cost of these drugs to treat obesity earlier this year.In addition to prescription drug inflation, recent legislation has also had an impact. Senate Bill 268, passed during the 2022 legislative session, led to a $70 million increase in pay to health care providers. It mandated a spousal surcharge based on the actuarial value of covering the spouse and increased premium rates to restore an 80/20 employer/employee premium split.The surcharge is for members whose spouses are offered employer-sponsored insurance but choose coverage through a PEIA plan instead.

Call for Permanent Solutions

Addressing the board after the vote, Dale Lee, president of the West Virginia Education Association, emphasized the need for state lawmakers to find permanent fixes for the insurance agency. He understands that the finance board's hands are tied and they must approve the increases, but he urged officials to look for solutions to assist employees.Lee criticized lawmakers for failing to act on proposals established by a PEIA task force formed in 2018 following the settlement of a teachers strike. He believes that the changes made by the board on Thursday show the effectiveness of the public hearing process and called on the incoming gubernatorial administration to work with lawmakers on a permanent solution for PEIA.“There's still a lot of work to be done with this,” Lee said. “A lot of work. And it's going to take Gov.-elect [Patrick] Morrisey and this new Legislature coming together with all those involved - the finance board, the providers, the participants, the agencies - everyone has to come to the table and say, ‘where can we make changes? What can we do to help this?’ Because under this plan that we just adopted, in most cases your hands were tied, and the burden still falls on the employee. The largest amount still falls on the employee.”In a statement Thursday afternoon, Kristie Skidmore, president of the teachers union AFT-WV, said that while the board made few positive changes, the approved plan is still “devastating” for many workers. She called on all education and public employees to call legislators during the December 8-10 interim session and ask them to make stabilizing PEIA and providing affordable healthcare a priority.