CHARLESTON, W.Va. - State employees, teachers, and all others who have their health insurance through the Public Employees Insurance Agency can expect to see either 9 percent increases in their premiums, benefit cuts totaling up to $24 million, or some combination of both.

"We are an insurance company. We're not an entitlement program like Medicaid," PEIA executive director Ted Cheatham said Thursday of the need to raise premiums, cut benefits, or do both.

He noted that PEIA has not increased premiums for state employees in three years, at a time when private-sector health insurance premiums have increased at a rate of 10 percent to 14 percent a year.

On Thursday, the PEIA Finance Board approved a proposed 2009-10 coverage plan that would increase employee premiums by 9 percent, if no benefit cuts are made.

The proposed plan Thursday offers a variety of benefit changes that, if all are adopted, would save the plan $24 million a year, and would significantly cut the premium increase.

The largest savings, $8.1 million, would come from increasing co-pays for insurees who go to out-of-state providers who are part of the PEIA provider network from 20 percent to 30 percent.

"The intention here is to truly say, if you have a choice, go to the West Virginia provider," Cheatham said.

However, Perry Bryant, who represents education employees on the board, said the change would punish PEIA insurees in border counties, particularly those in the Eastern Panhandle.

"It's going to hit the Eastern Panhandle predominately," he said. "This is a portion of the state that has a difficult time filling teacher positions and other public employee positions currently."

CHARLESTON, W.Va. - State employees, teachers, and all others who have their health insurance through the Public Employees Insurance Agency can expect to see either 9 percent increases in their premiums, benefit cuts totaling up to $24 million, or some combination of both.

"We are an insurance company. We're not an entitlement program like Medicaid," PEIA executive director Ted Cheatham said Thursday of the need to raise premiums, cut benefits, or do both.

He noted that PEIA has not increased premiums for state employees in three years, at a time when private-sector health insurance premiums have increased at a rate of 10 percent to 14 percent a year.

On Thursday, the PEIA Finance Board approved a proposed 2009-10 coverage plan that would increase employee premiums by 9 percent, if no benefit cuts are made.

The proposed plan Thursday offers a variety of benefit changes that, if all are adopted, would save the plan $24 million a year, and would significantly cut the premium increase.

The largest savings, $8.1 million, would come from increasing co-pays for insurees who go to out-of-state providers who are part of the PEIA provider network from 20 percent to 30 percent.

"The intention here is to truly say, if you have a choice, go to the West Virginia provider," Cheatham said.

However, Perry Bryant, who represents education employees on the board, said the change would punish PEIA insurees in border counties, particularly those in the Eastern Panhandle.

"It's going to hit the Eastern Panhandle predominately," he said. "This is a portion of the state that has a difficult time filling teacher positions and other public employee positions currently."

Bryant said an increase in health care costs would make it even harder for the panhandle counties to compete with neighboring states, where teacher salaries are significantly higher.

"We shouldn't be penalizing employees for where they happen to live," he said. "A salary reduction isn't the way to recruit and retain high-quality educators."

Bryant's proposed removing the co-pay increase from plan options, but the board rejected his motion.

The board will vote on a final plan in December, after conducting six public hearings around the state, beginning Wednesday in Wheeling, and concluding Nov. 19 in Charleston and Nov. 20 in Huntington.

Dale Lee, president of the West Virginia Education Association, said the time frame makes it difficult for teachers and public employees to get information about the plan options in order to comment on them at the public hearings.

"There is simply not enough time for educators, and people involved in the plan to take a look at the proposed plan," he said, suggesting that the whole public hearing process is a "sham."

The premium increases or benefit changes that are adopted by the finance board in December will go into effect on July 1, 2009.

Reach Phil Kabler at ph...@wvgazette.com or 348-1220.