House, Senate Propose Additional Long-Term PEIA Solutions

Feb 19, 2018

As the insurance program for public employees continues to be a large part of the conversation this legislative session, the West Virginia House and Senate each proposed mechanisms Monday, Feb. 19, to provide some long-term relief. While the House of Delegates Finance Committee originated a bill to put budget surpluses toward the Public Employees Insurance Agency (PEIA), the Senate amended a bill that would send some revenue from sports betting to the insurance program.

The House Finance Committee originated and passed a bill that would put the first 20 percent of budget surpluses into the PEIA Stability Fund. Under current law, half of surpluses are required to be deposited into the state’s Rainy Day Fund, with the rest usually going to general revenue appropriations. The bill, which didn't yet have a number as of Monday evening, would cap surplus transfers into the fund at $75 million annually. The measure now heads to the floor.

According to a news release from House leadership, the state’s year-end surplus has ranged from about $12 million up to nearly $339 million during the past eight years. West Virginia ended Fiscal Year 2017 with a $76 million surplus.

“Many people don’t realize that, despite our budget struggles over the past few years, West Virginia always ends the budget year with a General Revenue surplus thanks to our balanced budget amendment,” House Finance Chairman Eric Nelson said in the release.

House Democrats, who have repeatedly criticized the Republican majority of ignoring a long-term solution to PEIA, see this move as the first step toward fixing a long-running problem.

“I think it’s a step in the right direction. It’s the most meaningful thing we’ve done on the issue of PEIA since we’ve been back here this session,” House Finance Committee Minority Vice Chair Mick Bates said. “Everything else has been empty promises and symbolic gestures.”

In the Senate Monday, Democrat Sen. John Unger offered an amendment that would put revenue from a proposal to legalize sports betting toward the PEIA Stability Fund. If it were to become law, Senate Bill 415 would place the first $15 million in annual state revenues from sports betting toward the Lottery Fund and excesses of that amount toward stabilizing PEIA.

“The fund will not apply to the 80-20 employer-employee split,” Unger said, noting that current law dictates a ratio of employers paying 80 percent of premiums with employees contributing the remaining 20 percent. The PEIA Stability Fund is seperate from the PEIA Basic Insurance Premium Fund.

“Of course, the House has acted on doing a freeze in regards to the Rainy Day Fund, which is not a fix. This would allow for a revenue source to go into PEIA and not affect the premium,” Unger added.

The amendment passed unanimously, 34-0. Senate Bill 415 now goes on to third reading Tuesday for a full vote of the Senate.

As Unger noted, the Monday proposals follow other efforts from the House of Delegates last week.

The House Finance Committee originated and passed House Bill 4620 on Feb. 14, which would transfer $29 million from the Rainy Day Fund to the PEIA Basic Insurance Premium Fund.

“This is an unusual step. [But] we've heard much from our teachers and state employees about the uncertainties of PEIA,” Nelson said Wednesday on the floor about House Bill 4620.

House Bill 4620 passed the full House Friday and now is in the hands of the Senate Finance Committee.

The House also amended and passed last week a bill dealing with landowner and mineral rights related to natural gas drilling. An amendment to House Bill 4268, offered by Democrat Del. Phil Isner, would place 50 percent of state revenue from unknown and unlocatable landowners into the PEIA Stability Fund. The other half of that revenue would go to an oil and gas reclamation fund.

The conversation surrounding PEIA’s rising premiums and deductibles runs parallel with teachers’ growing frustration about salaries. Leaders of the state’s teacher unions announced Saturday a two-day statewide work stoppage for this Thursday and Friday.