Personnel shakeup hits Administration, Insurance Commission, PEIA

A shakeup in the West Virginia Department of Administration includes the ouster of Cabinet secretary Allan McVey and the apparent pending retirement of the state’s longtime Public Employees Insurance Agency director.

McVey has been named state insurance commissioner, the position he held before becoming secretary of Administration.

He replaces Commissioner Jim Dodrill, who announced in September that he would be stepping down as soon as a replacement was found. Dodrill had been commissioner since March 2019, when McVey was promoted to head the Department of Administration.

Mary Jane Pickens, deputy secretary of Administration, has been named acting secretary.

Additionally, longtime PEIA director Ted Cheatham reportedly is retiring, effective Oct. 31.

Both Cheatham and Administration spokeswoman Samantha Knapp had no comment Tuesday when asked to respond to reports of Cheatham’s pending retirement.

PEIA has been a flashpoint for the Justice administration, with uncertainty over future funding for the health care plan for public employees being a major factor leading to statewide teacher strikes in 2018 and 2019.

At the PEIA Finance Board meeting on Sept. 23, board members learned that investment earnings helped offset higher-than-expected medical costs for the plan in the 2020-21 budget year, but West Virginia Education Association President Dale Lee reminded them that relying on investment income is not a long-term solution to PEIA funding issues.

“The news is good for this year, but we are facing a challenge coming up,” Lee said.

“We knew in 2018 that just a Band-Aid was not going to be the fix our people want,” he said, referring to the statewide teacher walkout.

Lee also noted that a PEIA task force appointed by Gov. Jim Justice as part of the settlement of the 2018 walkout has not met since January 2019, and that the Legislature has failed to act on any of the task force’s recommendations.

That has left teachers and school service personnel feeling as if they do not have a seat at the table to work on long-term solutions for PEIA, he said.

“It makes people leery,” Lee said. “It makes people angry.”

Cheatham’s retirement would come at a critical time for PEIA, with the 2022-23 benefits package to be unveiled at the Finance Board’s Oct. 21 meeting.

The Finance Board will then conduct six public hearings on the proposed benefits package between Nov. 8 and Nov. 18, with a virtual town hall scheduled for Nov. 8, and a hearing in Charleston set for Nov. 9, with board members tentatively scheduled for a final approval vote on the plan in December.

PEIA provides health care coverage to more than 230,000 state, county, municipal, public school and higher education employees, retirees and survivors.

Last fall, Cheatham announced that there would be no premium increases for active employees for the third straight year under the plan currently in effect, but financial projections indicated that premium increases will be needed for the 2022-23 plan year to keep up with rising medical and pharmaceutical costs.

Cheatham has been PEIA director since 2007, appointed by then-Gov. Joe Manchin.

Last fall, PEIA unexpectedly announced that it would put its Medicare Advantage Plan contract out to bid in early 2021, rather than exercising the first of two one-year options on its contract with Humana. At the time, Cheatham sounded almost apologetic about putting the contract out to bid, saying of the Humana coverage, “There’s no financial issues. There’s no quality issues. There’s no service issues.”

It was later revealed that Cheatham had recommended doing a contract extension but was overruled by the Governor’s Office. Ultimately, Humana was again the winning bidder for the contract.

Oct. 31 is a common retirement date for state employees, since, under state law, employees who retire on that date are given service credit for the remaining two months of the year.

The Department of Administration shakeups began in September with a brief statement from the Office of the Insurance Commissioner, stating, “James Dodrill will be stepping down as West Virginia Insurance Commissioner. He will continue in this capacity until a new commissioner is appointed by Gov. Justice.”

In his short tenure, Dodrill oversaw modernization efforts in the office and expanded and rebranded the agency’s fraud unit as the Special Investigations Division, empowered to investigate and prosecute all types of insurance crime, rather than emphasizing consumer fraud.