According to West Virginia Education Association President Dale Lee, the fight to attract new teachers to the state's public school system might soon get a whole lot tougher.

If the finance board of PEIA, (Public Employee Insurance Agency) votes next month to approve plans to eliminate the retiree health care subsidy for individuals hired after January, 2010, Lee, a 23-year Mercer County teacher who is currently on a leave of absence from Princeton Senior High School, says future teachers would have less reason to accept jobs in the state that already offers lower teaching salaries than almost every state in the nation.

“I fear that this will impede us in the ability to attract and retain quality teachers,” he said. “We already have trouble competing with Virginia and other bordering states. If we reduce the benefits that we offer, that certainly doesn't bode well for West Virginia.”

PEIA is the health insurance provider for all state and municipal employees of West Virginia. Currently, the state subsidy pays approximately 70 percent of the health care premium for employees who retire between the ages of 55 and 65, before they are eligible for Medicare coverage. In a surprise vote in May, however, the finance board voted to entirely eliminate that subsidy for all state employees hired after January, 2010. That action is being reconsidered now, after concerns were raised over the issue not being present on the agenda of the May meeting.

In their June 4 meeting, the board amended last month's motion to allow for a public vetting period before the matter is voted upon again in July. This week, that period started with the first two of six statewide public hearings in Beckley and Martinsburg. Before the issue comes up for vote again, four more hearings will be held throughout the state.

“People need to come out to these hearings to have their voice heard,” said Lee. “They need to tell the finance board that their action was premature and to get people to the table, get the constituent groups to the table to come up with solutions for this problem.”

The problem that PEIA is facing relates to a relatively new accounting practice adopted by the state, which requires the future liability of all employees to be documented in the state's record books. Known as the OPEB liability, (Other post-employment benefits) this debt, which totals $7 billion for all current employees, tallies the future cost of retirement benefits for all state workers. While the debt doesn't have to be paid off now, its existence as such a large debt in the books negatively affects the state's bond rate.

“The issue with this new accounting practice is that if you have this huge OPEB liability, it's not good for the bond rate, and that's why the governor is concerned about it,” explained Judy Hale, president of the American Federation of Teachers West Virginia, an organization whose members are actively speaking out against the proposal.

The governor and state legislators alike have voiced concerns over the large liability, but when a bill was introduced during a state legislative session this year that would have ended the retiree subsidy for people hired after 2010, it was defeated. Similarly, 50 state delegates involved in a labor caucus last week unanimously opposed the proposal. However, though PEIA was set up by the state legislature, the agency's finance board has the freedom to make the final decision regarding the matter.

“All of the surrounding states pay at least part of the retirement subsidy, and three of them (Ohio, Maryland and Pennsylvania) pay 100 percent of it,” said Hale. “There are only five states in the country that don't pay any retirement health care. This simply means that we would just not be competitive at all because we wouldn't be able to offer health care for retirees. If this happens, we're going to continue to lose teachers across the state borders.”

While the proposed plan would still allow for future pre-Medicare retirees to get their health care coverage through PEIA, they would have to pay the entire premium on their own. At today's rates, Hale says, that would take many individuals' health insurance costs up to some $900 per month, an impossible payment for many living on retirement pensions.

“These are people who retired pre-age 65, and typically they need more health care than a person who is working,” she said. “The health care costs are more, much more, and now we're going to ask them to pay over $900 a month for their premium? The liability is very expensive for the state, but at the same time, these are teachers who have worked 35 to 40 years in the system who would not be able to afford health care from the time they retire. This would really discourage young people from getting into teaching and we already have a lot of shortage areas, as it is.”

While the proposed subsidy elimination would not affect any current state retirees or employees, many from those groups are still speaking out in staunch opposition of the plan. That includes Tom Farmer, a retired teacher who taught for 33 years in the Mercer County Public School System, as well as actively participating in the Mercer County Education Association and serving four years as the president of the WVEA's retiree organization. He says that state leaders should keep the retirement health care subsidy and consider other options to ease current budget woes.

“Their excuse is that we have no money,” he said. “It's really funny that they can raise the governor's salary, no problem. They can raise the house and senate salaries, no problem. They can remodel the governor's house and the capital building, no problem. Whatever the governor wants, he gets. It's a matter of priorities, and in West Virginia with Governor Manchin, retirees are not a priority.”

According to Matt Turner, the governor's director of communications, though, Manchin is more concerned with the way the PEIA finance board comes to their decision than with the decision that they make.

“The governor recognizes that they've got to address this liability, because he's very keen on our state's future; he doesn't want to leave a debt to our grandchildren that they can't pay,” he said. “He wants the finance board to think about it, and study it before their decision, and he knows that's what they're trying to do. His concern is that it is all done very transparently, with adequate time given for people to weigh in on this and to share their thoughts about this situation. In the end, he knows the PEIA finance board has to make a responsible decision so they're not bankrupting our grandchildren.”

Farmer, though, believes the concern in this situation should be for the future teachers and other state workers who might not be able to afford health care insurance when they retire if PEIA's new plan is approved a second time.

“What this is going to do is hurt these people, and we consider it a real slap in the face to people who have worked and dedicated themselves to the schools or the county. This would more than triple the premiums, and it doesn't make a whole lot of sense to ask people when they retire to pay more with less. And, the second thing this is going to do is hurt the whole state education system, which is ultimately hurting the children.”

And that, Hale says, is why West Virginians should come out in full force to make their voices heard at PEIA's remaining public hearings. While she, like other education leaders throughout the state, understands the concerns over the OPEB liability, she believes better solutions to the problem could be reached.

“We know that PEIA has to figure out a way to offer benefits and charge premiums so they have a balanced budget,” she said. “But, this is so critical to our profession as well as to the individual who is going to give 35 to 40 years to the state of West Virginia and then find themselves when they retire without health care. It's extremely important that people come let the finance board know how they feel about this, and ask them to sit down with all stakeholders and come up with some solution. There are other solutions out there besides just completely taking away people's health care.”

PEIA's remaining public hearings regarding the retirement health care subsidy will take place June 29, in Charleston, June 30, in Wheeling, July 6, in Morgantown, and July 7, in Huntington. For more information, visit www.wvea.org, or call 1-800-642-8261.