CHARLESTON — The recently created PEIA Rainy Day Fund that will have $105 million from the state’s general revenue fund next fiscal year could cover increasing costs for health insurance for state workers all of the way into the 2022 fiscal year.
PEIA Executive Director Ted Cheatham discussed the additional funds, which should keep premiums down for state workers, following the PEIA Finance Board meeting Thursday in Charleston. Cheatham said costs will continue to climb and the additional funds will help.
“We’re fine for (fiscal year) 2020 and then in 2021 we’ll need something less than $100 million so we should be fine,” Cheatham said. “It may even help us get us into the next year (fiscal year 2022).”
Cheatham said PEIA will definitely need increased funding in Fiscal Year 2021.
“In my mind that’s somewhere $50 million to $80 million as far a crystal ball goes,” he said.
Lawmakers passed Gov. Jim Justice’s proposal to create the new rainy day fund and he signed it into law. Lawmakers will be able to appropriate revenue surpluses into the account. According to the new law, the governor would have to authorize money from the fund to be transferred to PEIA.
“State code says the governor will send a letter to the secretary of revenue to have the money transferred to us,” Cheatham said.
PEIA costs are expected to go up about $26 million next fiscal year. The normal climb in costs is about $50 million a year but Cheatham said the program is having another good claims year.
“We’ve had good claims this year and our (prescription) drugs have done real well this year,” Cheatham said.
A decreasing number of state workers has also helped, Cheatham said.
“That’s another reason why our costs are down. Our revenues are down but our costs are as well,” he said.
The PEIA Rainy Day Fund was originally supposed to have $150 million in it including $105 million from the general fund and $45 million through a fee assessed to agencies who get most of their money through special revenue such as fees or federal government funding. Lawmakers eliminated the fee proposal.
The PEIA Task Force that was created after the 2018 education workers strike hasn’t met since Jan. 8 when it made two recommendations. One would give the Legislature an annual deadline for dealing with PEIA’s finances. The other deals with the 80-20 cost formula.
Cheatham said Thursday he hasn’t heard what the next step will be for the task force.
Meanwhile, both PEIA’s investments and the agency’s trust fund continue to show strong numbers. Finance board members learned Thursday investment income has made $1.7 million this fiscal year with an end-of-fiscal-year balance of $220 million expected. The PEIA Trust Fund is projected to have a balance of $982 million at the end of the fiscal year with that projected to top $1 billion by the end of the 2020 fiscal year.