BUCKHANNON – The Upshur County Commission last week voted to make the switch back to the West Virginia Public Employees Insurance Agency – PEIA – from self-insurance.
The change will go into effect July 1, 2020 – the beginning of the 2021 fiscal year. The commission previously utilized PEIA but opted to transition to being fully self-insurance with third-party administrator EBSO in April 2010, according to Upshur County Administrator Carrie Wallace.
During the Jan. 16, 2020 county commission meeting, commissioner Sam Nolte made the motion to make the switch and commissioner Kristie Tenney seconded the motion. County Clerk Carol Smith said some factors will still need to be hashed out after the transition is made.
“We still have some things that have to be worked out, but basically I think deciding to make the transition back to PEIA gives us the option to start working on those things,” Smith said. “Once we get switched it becomes, ‘now let’s get all this stuff worked out.”’
Wallace said one aspect that will still need to be examined is retirement.
“After the special meeting (earlier this month), the most important thing we still have to address is the retirement subsidy for those that are unsubsidized through PEIA,” Wallace said. “If you vote to move forward, we can start that serious discussion and find out what you’re going to be able to afford and what’s going to be affordable for the employees as well.”
In early December, Wallace informed commissioners their current method of funding employee health insurance – self-insurance –was no longer sustainable. The county spent more than $1.6 million on employee health insurance in fiscal year 2018-2019 and had already spent close to $900,000 on insurance in the first five months of the 2019-2020 fiscal year alone as of December 2019, according to a previous article.
Consequently, commissioners invited USI Senior Vice President Pete Thackston to present options for switching to PEIA insurance at a special Jan. 8. 2020 meeting, and the county also hosted a meeting Jan. 10, during which employees could ask questions about the possible switch to PEIA.
“With any health plan, it can be economic-driven,” Thackston said. “One thing I’m pleased about is what the county is going to do for you all and the employees. What I’m going to spend the most time explaining … is what’s called a Health Savings Account or HSA because a lot of these savings are going to be passed back to you all.”
PEIA provides multiple plans from which to choose, but Thackston, at that time, said he believed Plan C would be the best choice for county employees.
“You look on there with EBSO you have a $500 deductible for a single and $1,000 with the family and this is after your HRA and all that,” Thackston said. “Then you have a 70/30 [split], you pay 30 percent of the cost with coinsurance until you reach $2,495 a single and $4,990 a family.”
Before he went into details about the PEIA plan, he explained what an HSA is.
“An HSA is a Health Savings Account, and that is a program [that allows you] to put money into a plan, whether it’s from your employer and/or yourself with certain limits by the federal government that allows for you to save money to use these funds for out-of-pocket medical expenses, dental expenses and vision expenses,” Thackston said. “It is your money that is put in there by the county.”
Thackston referenced a comparison sheet between PEIA and EBSO – the third-party administrator the county utilized in its self-insurance model – when discussing PEIA’s Plan C.
“At the very top you see a $1,400 single deductible and $2,800 for a family,” Thackston said. “Then you see the maximum out-of-pocket of $2,500 for a single employee and $5,000 for a family, so it’s about the same as what you have now.”
“However, the commission, for a single (county) employee, is going to put in $2,000 into your Health Savings Account for a single and $4,000 for a family,” he added. “If you look, the net out-of-pocket, if somebody (an insured employee) maxes their out-of-pocket, your (the county’s) maximum out-of-pocket is going to drop to $500 per single employee and $1,000 a family.”
He said the money deposited into the HSA is the employee’s money and does not expire or ever go away once deposited.
“The beauty behind this is, because there is a substantial difference in cost of the self-insured plan versus the PEIA … for one, the reimbursement costs to providers are much lower. Therefore, the pricing is lower for premiums, and it is a form of managed care as well,” Thackston said.