After a difficult year, PEIA needs a mulligan on its annual financial plan
The Public Employees Insurance Agency, which ended the last fiscal year with $93 million, needs more time to develop a financial plan for next year.
This is usually the time of year when the PEIA develops a plan, presents it to its financial oversight board, and makes public comments at a few stops around the state. After that, the proposal goes to the Legislative Assembly for budgeting for the coming year.
But when the PEIA Finance Board met on Thursday afternoon, agency chief Jason Haught said the plan was not quite ready yet. He offered to take just a little longer and come up with a full version in about two weeks.
“I would like to apologize to the board. PEIA was unable to complete its 24-year plan to present to the board. As you see, this was on the agenda and we thought we could do that by today, but we didn’t have the ability to do that to get to the completion of that funding plan,” he said.
“As you know, we had an extremely difficult 22 year. We are doing our best to ensure that we include all 23 results before putting in place a five-year funding plan.
Haught said agency officials reluctantly made the decision to delay, but it was necessary to gather as much financial information as possible. “So again, my apologies. But I want to be right. When you have good numbers, it’s easy to come up with a financial plan,” he said, but bad numbers are a bigger challenge for planning.
Over the past fiscal year, PEIA has been pressured by increased drug demand and medical expenditures with a lower than expected return on investment. Much of this has been attributed to societal behaviors and economic effects resulting from the covid-19 outbreak, and officials overseeing the state’s insurance agency now hope much of it will ease. .
West Virginia Education Association President Dale Lee spoke at the meeting and expressed concern about the financial future of the insurance program.
“I understand the bad year 2022 we’ve had and the desire to have everything right for the public hearing,” Lee said. “What that tells me is that at least in my years of work, we’re struggling to come in the years to come.
“While I do believe that this year’s plan that will be retired, fiscal year 2024, will not show any increases for employees – the governor said that was his wish, and I believe it will be the wish of the board – at some point we have to pay the piper. And I know you’re sick of me saying every year that we’re going to have problems in the years to come.
A statewide teachers’ strike in 2018 focused on instability with insurance costs for educators. After that, a PEIA task force met regularly for several months, but its work was halted before the recommendations were implemented.
Governor Jim Justice has promised that his administration will cover any shortfalls with the PEIA during his term, which extends through 2024. Currently, the state has enough money to do so, the governor boasting a general fund surplus of $1 billion in the past fiscal year. year.
But as the governor has traveled the state in recent weeks, he has expressed concern about PEIA’s long-term financial stability. His remarks came in the context of his skepticism of the Second Constitutional Amendment, which would allow the Legislature to exempt property taxes on vehicles and for businesses on their inventory, machinery and equipment.
Justice described the possibility of unforeseen economic circumstances that could put West Virginia in a bind for programs like PEIA.
“The wheels will fly off, guarantee it. They fly into each of our lives all the time,” he told South Charleston this week. “It’s either going to be PEIA needs money, we need pay raises, we need matching dollars to get federal funds, whatever, Medicaid, whatever – we’re going to have bumps in the road. .”
Today in Richwood, he reiterated that concern. “What if PEIA is reversed?” He asked. “What happens if things happen? »
When the PEIA council releases the plan for the coming year, locations and dates include: 6:00 p.m. Nov. 9 at the Charleston Cultural Center, 6:00 p.m. Nov. 10 at Beckley-Raleigh County, 6:00 p.m. Nov. 15 with a phone call at City Hall, 6 p.m. Nov. 16 at the Holiday Inn Martinsburg, 6 p.m. Nov. 17 at the Holiday Inn Morgantown, and 6 p.m. Nov. 18 at Wheeling’s Highlands Event Center.