State employee insurance plan begins in July

Jan. 09--CHARLESTON â?" Legislators were briefed Monday morning on what state employees will be paying for health insurance for Fiscal Year 2019 under the Public Employees Insurance Agency (PEIA) plan.

The new plan takes effect July 1 this year, PEIA Director Ted Cheatham told members of the Joint Standing Committee on Finance.

Cheatham said PEIAâ??s top cost increase stems from prescriptions.

So active members and retirees will both see a change in prescription coverage, from a fixed copay to a 20 percent coinsurance for each prescription. To avoid excessive costs, he said, patient cost for each 90-day prescription will be capped at $100 and for each 30-day at $50.

The plan he presented Monday, he said, is slightly different from what he presented previously, based on public employee comments from meetings around the state.

State employee premiums will increase by half a percent because the Legislature gave PEIA an additional $10 million for the year, and PEIA has to maintain the 80-20 ratio.

Salary index codes will be decreased from 10 to five, â??for administrative ease.â? They will go in $30,000 increments: $0 to $30,000, $30,001 to $60,000, and so on. The top tier is $120,001 and above.

Within each salary range will be four levels of coverage, he said: Single employee, employee plus children, employee plus spouse and full family.

PEIA will base premiums on total family income if the spouse is employed, Cheatham said. It reflects ability to pay, and this amounts to a sort of spousal penalty, he admitted. In some cases, it might be cheaper for the couple to maintain separate coverage.

For instance, according to a chart he provided, a single employee making $35,000 per year would pay $81 a month under Plan A. If the employee and spouse both make $35,000, the premium for the same under their combined income would be $301.

Cheatham said that under the new plan, single employees and single employees with children will actually see their rates go down. â??Thatâ??s a good thing.â?

He anticipates that some employees, for privacy or other reasons, may not wish to divulge their total family income. They will be defaulted to the top income level. He also plans to introduce a bill to allow PEIA to obtain a salary range level â?" not the exact figure â?" from the state Tax Department.

He thinks that would reduce a lot of work for PEIA staff, but he admits he doesnâ??t know if the proposal will receive any support. â??Itâ??s an ask.â?

Starting July 1, policyholders will be asked to enroll in the Healthy Tomorrows program, a kind of carrot-and-stick effort to encourage healthy lifestyles and activities. On the carrot side, participants can earn points to buy items at participating stores. On the stick side, those who donâ??t meet requirements will see their monthly premiums rise by $25 a month starting July 1, 2019, and will see deductibles rise $500 on the same date.

Delegate Paul Espinosa, R-Jefferson, asked Cheat-ham why PEIA chose to base premiums on income and not on health risks.

Part of the reason, Cheatham said, is based on limitations on how PEIA can charge premiums.

And part is that an alternate proposal faced great opposition, he said. This was pay-by-the-person. PEIA knows what each additional family member costs to cover and proposed a plan with extra charges for reach extra person. But that proposal hurt large, low-income families.

One single teacher with four children, he said, told him how much her costs would rise. He suggested she could save money by putting her kids on the Childrenâ??s Health Insurance Program (CHIP), where they would receive better coverage.

â??I could have had my head chopped off,â? he said. West Virginia teachers have great pride and view CHIP as a charity program.

So they relied on a piece of state code that allows PEIA to consider ability to pay when setting up its premium structure, he said.

Follow David Beard on Twitter @dbeardtdp. Email [email protected].

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