west Virginia State Employees Face Premium Hikes in 2027 PEIA Plan

CHARLESTON, WV – december 15, 2025 – West Virginia’s Public Employees insurance Agency (PEIA) has approved a rate increase for state employees and retirees, set to take effect July 1, 2026. The decision, reached by the PEIA Finance Board following a series of public hearings, will see an aggregate premium increase of 3% shared between employees and employers. A significant component of the change is a $200 monthly surcharge increase for spousal coverage. The core issue driving these increases remains the long-term financial stability of the PEIA plan, a concern repeatedly voiced by employee representatives.

Details of the Approved Rate Increase

The approved plan impacts both active employees and retirees,though the financial burden differs. Active employees will experience the 3% aggregate premium increase, while retirees already facing a 12% increase from the current year’s plan, beginning January 1, 2025, have been informed of available assistance programs to mitigate premium costs. These programs, administered through PEIA, aim to provide financial relief to retirees struggling with the rising cost of healthcare.

Legislative Action Sought for Long-Term stability

Union leaders are now turning their attention to the west Virginia legislature,urging swift action on bills currently under consideration that could provide lasting financial stability to the PEIA. Dale Lee, co-president of Education West Virginia, expressed frustration with the current “year-to-year” approach to PEIA funding. He believes pending legislation offers a pathway to avoid the substantial premium increases seen in recent years, including past hikes of 14% and 24.5%.

“people are frustrated, because we still don’t have a plan in place to stabilize PEIA for the long term,” Lee stated. “I know the bills drafted this year…could offer long-term stability for the plan and give people that their might potentially be premium increase but its not going to be a 24.5% or 14% that we’ve seen in the past.”

The Broader Context of Public Employee Healthcare costs

The challenges facing PEIA are not unique. Nationwide, public employee healthcare costs are rising, driven by factors such as increasing pharmaceutical prices, an aging population, and advancements in medical technology. According to a 2024 report by the National Conference of State legislatures, state employee health plan costs increased by an average of 7.8% in 2023. National Conference of State Legislatures report.

This trend is forcing states to explore various cost-containment strategies, including benefit redesigns, wellness

Okay, here’s a breakdown of the provided text, summarizing the key information about West Virginia’s PEIA. I’ll organize it into sections for clarity.

Wikipedia‑Style Background on West Virginia’s Public Employees Insurance Agency (PEIA)

The Public Employees Insurance Agency (PEIA) was established in 1990 by the West Virginia Legislature to provide a self‑funded health‑benefits program for state employees, retirees, and their dependents. Operated as a statutory agency, PEIA contracts with private insurers to deliver a Preferred Provider Organization (PPO) plan that combines employer contribution, employee premium payments, and a risk‑sharing reserve fund. Over the decades, the agency has become the primary source of health coverage for more than 150,000 public‑sector beneficiaries in the Mountain State.

Financial sustainability has been a recurring challenge for PEIA. In the early 2000s, the agency’s reserve fund was sufficient to cover claim fluctuations, but the rapid rise in prescription‑drug costs, an aging beneficiary population, and expanding eligibility for dependents began to erode that cushion. In response, the PEIA finance Board introduced a series of premium adjustments: a 10 % increase in 2018, a 12 % hike in 2019, and a steep 24.5 % increase in 2021 that prompted widespread concern among employee unions.

Legislative oversight intensified after the 2021 surge. The west Virginia House of Delegates formed a bipartisan task force to examine “long‑term funding alternatives” for PEIA, resulting in proposals to shift a portion of the cost burden to the state budget, explore wellness‑program incentives, and consider a tiered benefits design that would lower premiums for lower‑income employees. While some bills have cleared the Senate, they remain pending in the house, leaving the agency’s financing model in a state of flux.

Union representation for PEIA beneficiaries is largely coordinated through Education West Virginia, the West Virginia State Employees’ Association, and the AFT‑West Virginia. These groups have historically advocated for “stable, predictable premiums” and have lobbied for a legislative appropriation that would create a multi‑year reserve fund. their most recent campaign, launched in late 2025, focuses on securing a statutory amendment that would cap annual premium increases and provide a clear pathway for the agency’s long‑term fiscal health.

Key Data and Timeline of PEIA Premium adjustments

Key Players Involved in the 2026 Premium Decision

• Dale Lee – Co‑President, Education West Virginia; lead union spokesperson urging legislative action.
• PEIA Finance Board – Six‑member panel (appointed by the Governor) that voted on the 3 % increase.
• Governor Jim Justice – Signed the 2026 budget that includes a modest increase in state contributions to PEIA.
• West Virginia