Aon Limited Insurance

The unions hope to monitor peia

Several of the largest unions in West Virginia are proposing to take control of the mammoth health plan state insurance for public employees.

The proposal includes some obstacles likely to be controversial.

, Is requesting a reduction immediate estimate of the health plan unfunded liability of $ 7,800,000,000 to $ 4 billion. The union commissioned a study that suggests estimating the state of funding gap has been exaggerated.

It also calls for a state commitment to $ 150 million contribution to pay down that debt the first year and subsequent contributions to that amount, plus 2 percent per year over the next 19 years.

A chart accompanying the report, indicates the necessary involvement of the State to withdraw from the debt in 20 years U.S. $ 218 million.

At the same time, the unions proposed, the State continue to finance benefits for current public health employees as it does now.

The graph shows total contributions of nearly $ state as 359 million in the first year and reaching more than $ 1.9 million in the year 20. The group making the proposal includes the West Virginia chapter of the Federation American Masters, but not the other major teachers union, Education Association of West Virginia.

A consultant hired by the union group suggested a three-page note to Governor Joe Manchin that the state should start putting money into a trust fund administered the union.

The unions essentially change the Board of Finance which oversees the state Public Employees Insurance Agency. Board members are defined by state statute.

"We want create an irrevocable trust of the whole program peia unions not only assume control of the trust, but also by virtue of taking responsibility, "said Bob Brown, executive director of the West Virginia School Service Personnel Association, a union of the sponsors of the report.

Brown hired group Chicago-based Aon Consulting to do the study. Other unions include the local chapters of the American Federation of Teachers, United Mine Workers of America Communication Workers of America, and the American Federation of State, County and Municipal Employees.

Aon said that over time "would be risky investment fully transferred to the unions "and that" a greater share of the responsibility for managing the benefit plan costs would fall on trade unions, providing incentives to manage benefit programs the most prudent way possible. "

To manage the program, the unions "would have a greater control over the structure of the plan benefits, coverage levels and costs associated with plan. "

The program, presumably, could fill the current role of Peia Finance Board, which sets the rates and benefits for active and retired public employees. This could potentially help policy makers in the state, taking the heat from them when the time comes to raise the costs of insurance or reduce benefits.

Aon's report was released the same day he began a series Idle public hearings on increasing Insurance Rates and other changes that are being waged by state employees unions.

But not everyone was immediately idea.WVEA for President Dale Lee said he knew about the Aon report until Monday. He said that while he is to give unions a stronger voice on health benefits was reluctant to support the consultant's plan, without further consideration.

"Now the property is to trade unions to manage this fund, the state would no obligation to fund this, "said Lee." I'm quite hesitant to relieve the state of responsibility without looking at the proposed plan more closely. "

State officials had only a limited response to the report of the unions, saying that deserves further study.

The report says that the state is overestimated by about 4 billion U.S. dollars of liability facing to cover future health costs of retirees.

The calculation controversy on non-pension benefits promised to teachers and other public employees after they retire. The so-called "other post-employment benefits", also known as OPEB, mainly reflect medical and life insurance.

To correct is a moving target that the Agency Public Employees Insurance recently estimated at $ 7,800,000,000.

Unions say that these benefits cost the state much less, only about $ 4-WV President Judy billion.AFT Hale said the $ 4,000,000,000 set point undermines the state to raise insurance premiums and other health care costs to reduce the costs of public employees medical care.

"If peia of figures for the OPEB liability are wrong, then what does it mean that the figures are used to justify changes in the plan are not fatally flawed peia well? "Said Hale.

Aon figures are open to revision, said company, calling the figure of $ 4 billion preliminary "discussion."

The main difference between the estimates of Aon and its own state Aon is expected to lower inflation in medical costs.

"As a result, if these assumptions are used in the analysis of what is required to fund fully the program, an overestimation of the costs of benefit plans and OPEB state distortion of the true magnitude of global responsibility will occur, "Found the report by Aon.

Aon has asked the state for more data to review its analysis.

But the report says that if his estimate initial is correct, then the state can launch a further $ 150 million an increase of 2 percent annually for inflation and pay your debt in 20 years. That was a decade earlier than state officials have discussed.

After that, the report suggests, unions must handle the state insurance program.

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