Legislative committee adopts final PEIA review recommending cost controls and premium changes

CHARLESTON, W.Va. — The joint standing committee on Insurance and the Public Employee Insurance Agency (PEIA) adopted a final report delivering recommendations from a BDO review and documenting board-proposed premium and plan design changes.

The committee adopted the final report on Jan. 12, 2026, after a brief meeting during which the committee clerk read the report’s findings and recommendations. "The BDO report cited a potential to lower PEI's net expenses by $55,000,000 representing a 5% reduction by adopting the 9 recommended policies," the committee clerk read to the panel.

Why it matters: The report outlines changes that would affect state and non-state employees, employers, and retirees — including proposals the PEIA board has advanced for the coming plan year. Those proposals include aggregate premium increases and changes to plan tiers and surcharges that would affect out-of-pocket costs for families and retirees.

Key findings and recommended actions: The BDO review highlighted prescription drugs as the leading cost driver for PEIA, citing that specialty medications accounted for about 1% of total scripts but roughly 42% of prescription drug costs, while generics made up approximately 89% of scripts and 12% of the cost. BDO grouped policy options into three categories: recommended, opportunistic, and low priority. Recommended items included reducing non–state-employee memberships, building an anti-fraud function, disenrollment options for spouses on other coverage, better wellness marketing, specialty drug solutions (including importation and carve-outs), and encouraging use of HSAs and high-deductible plans.

Board-proposed financial changes: The report recorded PEIA board proposals summarized by the agency’s CFO. Proposals described in the report include a 3% aggregate premium increase for state and non-state funds, an average family-tier spousal surcharge increase of $200, converting Plan D to a lower actuarial value, and a $2.50 increase in the employee administrative fee. The board also proposed offering a $500 employer-funded health savings account option or a reimbursement arrangement and adjustments to plan C premiums, deductibles and maximum out-of-pocket amounts (noted as increases). For the retiree fund the report noted a proposed non-Medicare and Medicare premium increase of 3%, raising pay-go from $10,000,000 to $55,000,000, and designating $30,000,000 from FY2025 investment gains as a retiree premium stabilization reserve.

Pharmacy benefit manager oversight: The clerk summarized earlier discussion of pharmacy benefit managers (PBMs), including testimony by the insurance commissioner and the Office of the Insurance Commission’s Life and Health director in prior interim meetings. That summary noted 2017 legislative history on PBM registration, auditing and licensing standards, pass-through rebates, NADAC pricing, reporting requirements and specialty-drug related enforcement and complaints.

Committee action and next steps: After the clerk finished, the cochair moved to adopt the language of the final report; members voiced 'aye' and the chair declared the motion adopted. The committee also approved minutes from the Dec. 8, 2025 meeting earlier in the session. No additional business was raised and the committee adjourned.

What the record does and does not show: The transcript records the committee reading and adopting a final report and documents the BDO findings and the board’s proposals as presented to the committee. The meeting record does not contain committee debate on specific policy trade-offs, amendments to the board proposals, or roll-call vote tallies; the clerk’s reading and the chair’s declarations are the explicit actions on the record.