Cities and Counties meet with PEIA Regarding OPEB and retiree health benefits

First, it is obvious from the meeting; there are few clear answers to the questions many cities have been asking regarding OPEB benefits and the retiree health issue.  With the passage of SB 715 this session, the answers will be delayed for rules that are being drafted by PEIA.  We are referring to the issue as PDD. (Pension Deficit Disorder)

Two things we learned is the benefits (usually health care coverage) create the OPEB liability.  The other, SB 715 has made minor changes.  One change will allow a city to formally opt out of the OPEB liability at the PEIA level on a going forward basis for new hires.  For example, if a city is a participant in the Consolidated Public Retirement Board but is not a PEIA participant, the city could take action to opt out of the defined post-employment benefits for new hires only. First, it is obvious from the meeting; there are few clear answers to the questions many cities have been asking regarding OPEB benefits and the retiree health issue.  With the passage of SB 715 this session, the answers will be delayed for rules that are being drafted by PEIA.  We are referring to the issue as PDD. (Pension Deficit Disorder)

Two things we learned is the benefits (usually health care coverage) create the OPEB liability.  The other, SB 715 has made minor changes.  One change will allow a city to formally opt out of the OPEB liability at the PEIA level on a going forward basis for new hires.  For example, if a city is a participant in the Consolidated Public Retirement Board but is not a PEIA participant, the city could take action to opt out of the defined post-employment benefits for new hires only. 

In other words, if a city is a member of PERS, but not PEIA, their employees who are employed today are eligible for PEIA benefits upon retirement; however, the rules will make the determination with individual scenarios being established.  There may or may not be an OPEB liability.  Currently if the city has health benefit coverage, other than PEIA they are not being billed for the OPEB liability from PEIA, but may have a liability on their own.  Accountants should be consulted on this question. 

For cities who participate in PEIA and PERS, the OPEB benefit liability is being billed, however, PEIA is not required to collect the amounts from cities.  We were told WV Code 5-16D establishes there is no interest liability that will be billed for non-payment.  The protests many of you have been sending were advised because of the language under the “Prompt Pay Act of 1995” in Chapter 8 for municipalities.  This decision will have to be made at the municipal level as to whether or not to continue the protests. 

Finally, for the past due billings, from errors made at the PEIA level, the agency will be pursuing these but it is unclear how they will engage in collection. We understand they may be turned over for collection by an outside agency.  It is also our understanding that a city may establish a hardship claim to request write off of the individual billing.  Cities who are receiving these past due billings, may want to contact the agency to look into the hardship claim.

As always, the League will continue to follow the issue and report directly to our members.  In the mean time, cities should direct all questions to Mr. Jason Haught or Mr. Keith Huffman at PEIA.