DAILY MAIL CAPITOL REPORTER
In the past month, it has cost the state of West Virginia $6million.
By year's end, that number will top $50 million
But the controversy over a policy that lets state employees tradeunused sick and annual leave for Public Employees Insurance Agencypremiums has largely subsided, a month after the Legislature failedto make changes to the benefit. A bill introduced by Gov. CecilUnderwood that would have revamped PEIA benefits fell apart in thefinal hours of the 2000 Legislature after organized labor rallied todefeat it. The main sticking point was a provision that would havelet an actuary set the trade value of the sick and annual leave daysfor current employees.
The consensus among lawmakers and the governor's office was thatthe battle would simply have to be taken up next year.
That has some private insurers shaking their heads, givenestimates that show the policy is costing the state about $150 aminute in today's dollars, and about $500 a minute in adjusteddollars.
'It appears to be something that would require immediateattention,' said Fred Early, general counsel for Mountain State BlueCross and Blue Shield, the state's largest private health-careinsurer.
'There are really only two solutions: eliminate (the trade-in)for all people, or grandfather in the folks who are in and end itfor the new hires.'
'It's like the big black hole,' added David Mathieu, vicepresident of marketing for the Health Plan of the Upper Ohio Valley.'This is a policy that's really come back to bite 'em.'
PEIA Director Bob Ayers couldn't agree more. He made anunsuccessful push to get Underwood's bill passed, and since itsfailure, has considered erecting a 'deficit clock' that would showthe public how fast the trade-in deficit is growing.
'I go to other states and tell them about this (policy), and youwouldn't believe the looks I get,' Ayers said. 'They say, 'Are youinsane?'
'I say, 'No, in 1984 we were insane. And we're still paying forit now.''
In 1984, state lawmakers, alarmed by absenteeism among stateemployees, decided to offer a carrot to keep people at work. Theypassed a law that let employees trade a single day of unused sick orannual leave for a month's single PEIA premium when they retire, andallowed them to trade two days for a month's family premium.
Whether the policy actually helped curb absenteeism is a point noone seems to recall. But by 1988, legislators were realizing thecarrot they'd offered was a bit too large.
That year, lawmakers cut the trade value of the days in half fornew employees. And that seemed to address the problem - until theexplosion of health care costs in the 1990s, which made the tradevalue of the days rocket, even at half their value.
Still, it wasn't until last fall that legislators began topublicly call attention to the problem. Senate Finance ChairmanOshel Craigo was the first, and the issue became one of the hottesttopics of the 2000 Legislature.
However, for all the talk, nothing was done. The governor's bill,an agreed-to bill between both houses, collapsed in the House ofDelegates. By the session's final night, even Craigo seemeddefeated, slumped at his desk and acknowledging the bill's imminentdeath.
There's been little discussion of addressing the issue during aspecial session, which some say is a concession to election-yearpolitics. But some private insurers still are surprised at the lackof outrage.
There isn't much that private insurers Mountain State and Acordiaof West Virginia agree on these days, since the two companies arelocked in a struggle for a disputed claims processing contract withPEIA.
But representatives of the two sides do share this view of thestate's sick leave-for-premiums policy: 'It's very unusual,' asAcordia president Andy Paterno says
Ayers has said West Virginia is the only state in the countrythat offers such a policy, although teachers union representativeshave pointed out that some other states do offer more generoushealth care plans for retirees.
However, Mathieu disputed one of teachers' main arguments: thatthey are entitled to the trade-in benefit because they were promisedhealth care benefits, instead of a pay raise, years ago.
'Good Lord, that was 12 years ago, when health care costs wereonly increasing at 3 or 4 percent a year,' he said. 'Now it's 10 or12 percent a year. That's a totally different situation.'
Mathieu suggests that state officials should offer pay raises inexchange for ending or reducing the benefit: 'I'd throw good moneyafter good and say, 'Here, we'll give you a $1,500 pay raise, justto get this off our necks.''
Unfortunately, been there, done that. Lawmakers proposed offeringteachers a $1,500 raise to try to get the governor's PEIA billpassed. However, teachers representatives said pay raises should beconsidered separately from PEIA.
For Early, it's just an example of the difference between theprivate and public sectors.
'In the private sector, you do one of two things to meet yourbudget: you cut costs, or you increase your revenue,' he said. 'Inthe public sector, you raise costs or you raise taxes.
'The question is, can you raise taxes?'
Writer Dan LeRoy can be reached at 348-7917 or by e-mail atdjleroy@dailymail.com.
