Public Employees Insurance Agency PEIA Health Insurance Issues

Public Employees Insurance Agency (PEIA) Health Insurance Issues

WVU Faculty & Staff Primary Concerns Ø Aggregate claims data not available. Ø No input in the employee premium structure. Ø No input into PEIA plan design or contribution decisions. Ø Benefits are not competitive and equitable. Ø Appears WVU significantly overpays premiums compared to claims paid. 2

WVU and PEIA Ø WVU is the 2 nd largest employer in PEIA. $54 M Ø Approximately 6, 000 are enrolled in health insurance. Ø A total $54 Million is paid annually to PEIA. + + + = $30 Million employer premiums $12. 5 Million employee premiums $11. 5 Million in RHBT*/Pay-go employer contributions $54 Million paid to PEIA annually − $30 Million claims paid annually by PEIA on behalf of WVU. = $24 Million excess to PEIA P R E M I U M S } $24 M excess $30 M C L A I M S *RHBT = Retiree Health Benefits Trust Fund 3

Salary Based Annual Premiums PEIA PPB Plan A – Family Coverage Premiums paid to PEIA $20, 000 $18, 000 PEIA COBRA Premium* $16, 000 Employee Premium - $6. 4 M $14, 000 Employer Premium - $13. 2 M $12, 000 $10, 000 $8, 000 $6, 000 $4, 000 $2, 000 $0 , 0 20 00 -$ $0 $2 0 0, 0 1 0 , 00 0 -3 $3 01 0, 0 0 , 00 6 3 0 , 00 2 4 $3 $4 01 6, 0 01 2, 0 50 00 $5 0 0, 0 00 1 - , 5 62 $6 0 2, 5 1 - , 0 75 00 $7 5 1 , 00 , 0 00 00 -1 00 $1 1 , 00 1+ 00 -1 , 0 25 2 $1 0 5, 0 • Many employees are paying much more than cost of coverage*. • Not all employees received the same level of benefits (the more one earns, the less benefit received). *Assumption: COBRA Premium (less 2% administrative fee) = cost of coverage. 4

Potential Annual Employee Costs PEIA PPB Plan A – Family Coverage $14, 000 $13, 263 $11, 488 $12, 000 Annual Out of Pocket Max Annual Deductible $9, 784 $10, 000 $8, 118 $8, 000 Annual Employee Premium $8, 639 $6, 989 $5, 964 $6, 000 $4, 542 $3, 404 $4, 000 $5, 191 Higher premiums + Higher deductibles + Higher Out-of-Pocket= $2, 000 Triple + 01 , 0 $1 25 00 25 , -1 $1 00 , 0 01 01 , 0 $7 5 0 00 00 , 0 -1 -7 01 , 5 $6 2 $5 0 , 0 01 -6 5, 2, 00 0 50 0 00 0 -5 $4 2, 00 1 -4 01 , 0 0, 00 0 2, 00 0 6, $3 6 $3 0 , 0 01 -3 0, -3 01 , 0 $2 0 $0 -$ 20 , 0 00 $0 5

RHBT/Pay Go Ø Retiree Health Benefit Trust Fund • WV state code § 5 -16 D-2 (effective 2006) requires employers covered by PEIA to contribute additional funds to subsidize retiree premiums. • RHBT Premium = $176 per month for all active employees with PEIA health insurance. • Effective July 1, 2010, new benefits eligible employees are no longer eligible for subsidized retiree health insurance premiums, however, since this time WVU has hired more than 1, 964 employees and paid over $5. 69 Million in RHBT for employees who are not eligible for subsidized retiree insurance premiums. • WVU is paying RHBT premiums for employees for phantom retiree health benefits. 6

Faculty & Staff. Goals & Faculty & Staff Objectives: Ø Offer competitive insurance benefits to increase recruitment and retention among faculty and staff. • Access to WVU aggregate plan utilization data to design wellness programs that meet our employee’s greatest health risk factors. • WVU employees’ premiums comparable to peers. • Ensure all employees pay the same deductible and out-of-pocket (Eliminate triple whammy). • Provide an insurance network that is more accessible for our employees. Ø PEIA pass cost savings to the University and State employers. • Pay premiums to PEIA based on paid claims. • Stop paying RHBT premiums for employees not eligible for subsidized retiree health premiums and return excess premium dollars to WVU. 7