The PEIA board voted 5-2 to uphold its May 14 decision to end health insurance subsidies for retirees for any employees hired after the beginning of 2010, although it moved the date back to July 1 to coincide with the start of budgeting year. The earlier decision took place during an emergency meeting of the committee that union officials allege was not legally noticed.

The board also voted to uphold an earlier decision to transfer $28 million from the retiree benefit trust fund to shore up retirement benefits, a move backed by unions.

Neither move was unexpected. As soon as the votes had been taken, the American Federated Teachers of West Virginia was passing out news releases announcing its intention to sue the board over what union leaders felt was a lack of public participation in the process.

“We will be looking to the courts to reign in the Finance Board and instruct them to start from scratch and conduct their business in the open,” AFT-WV President Judy Hale said in the release.

Retired state employees, including teachers, currently pay 30 percent of their insurance premiums thanks to state subsidies. But state officials say that policy is expensive. Projections indicate the policy will leave the state with $7 billion more in liability by 2030 than it would have without the subsidies in place.

The board voted in May to eliminate the program so any employees hired after Jan. 1, 2010, would pay 100 percent of their premiums after they retire. The change would not apply to current employees.

Union officials say such a move will make it harder for the state to recruit teachers and other state employees.

They also contend the May meeting was illegal because it had not been publicly noticed. In response, board members hosted a series of six public meetings across the state to take public comments on the decision, saying they would reconsider their votes once they heard from the public.

Elaine Harris was one of two board members who voted no. She said the board didn’t hear from any people in support of ending the subsidies during its six hearings. She also wanted to wait and see what will come out of Congress, which is now debating health care reform.

“I’m optimistic that something is going to happen on health care to work out some of the wrinkles,” she said.

But the soaring cost of providing the subsidies weighed heavily on other members. Board member Michael Smith said there “is not a prayer in Hades” that the state will be able to afford the subsidies, so promising future employees that they’ll be provided is essentially a lie.

“There is just not a prayer that money is going to be there, so why set up a false promise,” he said.

Board members acknowledged that moving back the effective date of the change to July 1, 2010, will give state lawmakers time to pass laws that could reserve their decision. Already 50 members of the state House of Delegates have signed a resolution asking the PEIA to not end the subsidies.