CHARLESTON — The finance board for West Virginia’s Public Employee Insurance Agency recently approved slight premium increases and other fee hikes for the state’s health coverage program beginning in July, though lawmakers had questions about possible changes.

The Joint Standing Committee on Insurance and PEIA met Monday morning during December legislative interim meetings at the State Capitol Building.

PEIA Director Brent Wolfingbarger updated lawmakers on the changes approved by the PEIA Finance Board last week for the new plan year beginning on July 1, 2026.

The fiscal year 2027 PEIA financial plan proposal for both the state fund and non-state fund (county and city governments) includes a 3 percent aggregate premium increase for both employees and Medicare/non-Medicare retirees – much less than the 14 percent premium increase for state employees, 16 percent increase for local government employees and 12 percent increase for retirees that went into effect earlier this year.

“There was a period of time between 2018 and 2022 that PEIA didn’t see any premium increases at all, even though our health care expenses were going through the roof,” Wolfingbarger said. “And that required us to overcompensate the last couple of years to bring our premiums back in line with where health care expenses are. So, we wanted to make sure that we did not repeat those mistakes in the past and that we would have prudent premium increases as necessary to make sure the plan didn’t come out of alignment.”

The board also approved an average family-tier spousal surcharge increase of $200 a month to comply with state code, which requires the employee to pay the actuarial value of the plan, which varies from year to year. That increases the spousal surcharge to $550 per month.

Wolfingbarger said the spousal surcharge was one of the major issues raised by public employees in November during a series of public hearings on the proposed PEIA plan for the upcoming fiscal year.

“This is a statutory obligation that PEIA must follow,” Wolfingbarger said. “And that is that if an employee spouse has health insurance available through any other private sector employee, then the employer, meaning the state agencies, may not cover any portion of premiums for the employee’s spouse unless the employee adds his or her spouse to his or her coverage by paying the cost of the actuarial value of the plan.

“Our actuaries indicated that in order to comply with this provision of the code, we needed to increase the spousal surcharge by $200 a month, and that’s what we have proposed,” Wolfingbarger continued. “That’s what the finance board voted to approve, and this was probably the single biggest point of contention when we went out to the public meetings.”

The approved PEIA proposal includes an increase for the PAYGO premium transfer from the active employee fund to the retiree trust from $10 million to $55 million. Another $30 million in gains will be transferred to the retiree premium stabilization reserve to extend the reserve’s solvency and significantly improve the state’s OPEB (other post-employment benefit) liability funding status.

“We were also very concerned about the rising health care costs for our retirees,” Wolfingbarger said. “When our actuaries first sent us their proposed premiums for next year, the retirees’ premiums were about ready to double. And so, we tried to really do everything we could to keep the retirees’ costs down.”

Discussions also centered on policy changes, including the lack of an 80-20 contribution mandate for non-state entities and whether to introduce a tiered spousal surcharge based on employee salary. Implementing such a tiered surcharge, similar to how premiums are structured, would require legislation.

“Some commenters indicated that they didn’t believe that it was fair that an employee that makes $40,000 a year whose spouse works for Go-Mart and has availability of health insurance through their employer should have to pay the same spousal surcharge as the school superintendent who makes $180,000 a year,” Wolfingbarger said.

“If the Legislature were to remove that provision of code, would that give you the flexibility to charge the spouses on the same 10-tier plan that you use for the employees?” asked state Sen. Mike Oliverio, R-Monongalia.

“It would give us the flexibility to take different approaches to the spousal surcharge, yes,” Wolfingbarger said. “We believe it locks us into allocating the same spousal surcharge to every employee regardless of salary level. And the statute could be modified to specifically indicate that PEIA has the discretion to take the same approach with the spousal surcharge that it does with premiums.”

As far as making non-state entities follow the same 80-20 contribution mandate – where the employer covers 80 percent of the cost of the plan and the employee covers 20 percent – as the state, Wolfingbarger said more study would be required.

“I’ve only been here eight months, but it struck me as unusual why state employers would have that 80-20 obligation and the non-states would not,” Wolfingbarger said. “So, I definitely think that further study and discussion is warranted on that subject.”