West Virginia lawmakers were briefed on approved changes to the state’s Public Employee Insurance Agency (PEIA) coverage during December legislative interim meetings. The updates include modest premium increases and higher fees for certain plan options, set to take effect in July 2026.
The Joint Standing Committee on Insurance and PEIA met at the State Capitol to review the new plan year. PEIA Director Brent Wolfingbarger presented the changes approved by the PEIA Finance Board, noting that the fiscal year 2027 financial plan for both state and non-state funds includes a 3% aggregate premium increase for employees and retirees. This is a significant reduction compared with the 14% increase for state employees, 16% for local government workers, and 12% for retirees that took effect earlier this year.
Wolfingbarger explained that premiums remained flat between 2018 and 2022, even as healthcare costs rose sharply. “That required us to overcompensate the last couple of years to bring our premiums back in line with where health care expenses are,” he said. The new 3% increase reflects a more balanced approach to maintaining PEIA’s financial health while avoiding large spikes for participants.
A key change is the increase in the family-tier spousal surcharge, which will rise by $200 a month, bringing it to $550 per month. State law requires employees to pay the actuarial value of coverage for spouses who have access to health insurance through another employer. Wolfingbarger said the surcharge was a major concern raised by public employees during November hearings. He noted that compliance with the statutory requirement made the increase necessary.
The proposal also includes a rise in the PAYGO premium transfer from the active employee fund to the retiree trust, increasing from $10 million to $55 million. An additional $30 million will be allocated to the retiree premium stabilization reserve to extend its solvency and improve the state’s other post-employment benefit (OPEB) liability funding. Wolfingbarger emphasized that these measures were designed to protect retirees from steep premium increases, which could have doubled without intervention.
Lawmakers and PEIA officials discussed potential policy changes, including introducing a tiered spousal surcharge based on employee salary. Currently, all employees pay the same spousal surcharge regardless of income, which some have argued is inequitable. A tiered system, similar to the way premiums are structured, would require legislative approval.
Senator Mike Oliverio of Monongalia asked whether removing the statutory provision would allow PEIA to adjust spousal surcharges according to salary tiers. Wolfingbarger confirmed that legislation would give the agency the flexibility to implement a scaled approach similar to the employee premium system.
Discussion also focused on the 80-20 contribution mandate, which requires state employers to cover 80% of plan costs while employees pay 20%. Non-state entities, including county and city governments, are currently not held to this standard. Wolfingbarger said more study is needed to determine whether non-state entities should follow the same contribution rules. “It struck me as unusual why state employers would have that 80-20 obligation and the non-states would not,” he said.
The PEIA updates aim to balance affordability for employees and retirees with the long-term financial stability of the program. Lawmakers expressed interest in monitoring the impact of these changes and evaluating potential future adjustments to spousal surcharges and non-state contributions.
With the new plan year starting July 1, 2026, West Virginia employees and retirees can expect a modest increase in premiums and the adjusted spousal surcharge. PEIA leadership emphasized that these measures are designed to ensure the program remains sustainable while providing reliable healthcare coverage to public employees across the state.
