PEIA ends fiscal year with $92M deficit

CHARLESTON — The West Virginia Public Employees Insurance Agency fund finished fiscal year 2022 with an almost $92 million loss, board members learned Thursday.

Returns on investments were about $30 million below projections, while insurance claims were higher than expected, Chris Borcik, with Continuing Care Actuaries, told the West Virginia Retiree Health Benefit Trust Fund and PEIA Finance Board members during their regular meeting Thursday afternoon.

The report the board heard was an improvement over estimates its members last heard in June. Those estimates projected the PEIA fund ending with a $100 million deficit.

It's at least the second year in a row the agency ended the fiscal year with a deficit. The agency ended fiscal year 2021, which ended June 20, 2021, with an operating deficit of $27 million, and that was with an "almost surreal" $40.6 million that year from investment earnings.

PEIA ended fiscal year 2022 in June with investment income $30 million below their estimates.

West Virginia Education Association President Dale Lee used the public comments period to share concerns that he's expressed for at least the past year — that he's confident Gov. Jim Justice will do what it takes to keep PEIA funded through the end of his term, but that might not be enough.

"What I'm worried about is where we go from there," Lee said. "What I'm worried about is when you lose the money that we lost in 2022, the volatility of the market, the increase in the medical costs, the prescription drugs and everything else … we're in trouble, and we're going to be in trouble in a couple of years."

Without government intervention, Lee said, he's concerned public employees in West Virginia will see double-digit percentage rate hikes in their insurance costs by 2025 or 2026.

"We all have to come to the table to figure it out, properly put it in the general fund, so that we know how it's going to be paid," Lee said.

Despite PEIA's deficit, the state of West Virginia ended fiscal year 2022 with a $1.3 billion surplus. Justice has touted the surplus as a financial cushion for a proposed 10% decrease in the state's personal income tax rate.