FISCAL NOTE

Date Requested: January 29, 2026
Time Requested: 04:47 PM

2807	Introduced	SB660
Agency:	Public Employees Insurance Agency (PEIA)
CBD Number:	Version:	Bill Number:	Resolution Number:
CBD Subject:	Insurance

FUND(S):

PEIA Basic Insurance

Sources of Revenue:

Special Fund

Legislation creates:

Increases Existing Expenses

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The purpose of this bill is to remove the requirement an employee pay the actuarial value for spousal coverage and require the employee to pay for coverage based upon their salary and tier of coverage. This bill will have a fiscal impact to PEIA. The current spousal surcharge is a fixed amount that is based on an actuarial value of spousal coverage. By converting the fixed amount to a varying amount based on ability to pay, there will be lower spousal surcharge premium costs for a majority of PEIA State Fund policyholders. With this lower cost spousal surcharge, it is assumed the plan will have an increase of 215 spouses at an estimated cost of $2.1 million. Additionally, the policy of detaching the spousal surcharge from the actuarial value of the spousal coverage will shift more of the financial burden related to paying for those spouses’ health care expenses onto the higher paid spousal surcharge policyholders. Moreover, because there are substantially more employees in the five lowest salary tiers currently paying the spousal surcharge (2,881) than employees in the five highest salary tiers who are doing so (1,659), the policy of linking the spousal surcharge to the employee’s salary and tier of coverage will dramatically increase the aggregate spousal surcharge assessed against those higher-paid employees. If the spousal surcharge for FY2027 remains at $550 per employee who is required to pay the surcharge pursuant to West Virginia Code §5-16-13 (b)(2) as incorporated in the FY2027 Financial Plan, utilizing the current salary based premium distribution levels, the combined amount of aggregate premiums and salary-adjusted spousal surcharges that are assessed against employees in those five highest salary tiers will increase between 41.45% and 69.33% in FY2027. (See below data for more details). There is also a possibility that the additional subsidization load caused by basing the spousal surcharge on salary level will cause employees in the highest salary tiers to leave the plan altogether, leading to higher premium increases for employees in all salary tiers, including the lowest ones.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2026 Increase/Decrease (use"-")	2027 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	0	2,100,000
Personal Services	0	0	0
Current Expenses	0	0	2,100,000
Repairs and Alterations	0	0	0
Assets	0	0	0
Other	0	0	0
2. Estimated Total Revenues	0	0	0

Explanation of above estimates (including long-range effect):

FY2026 INDEX TIER SALARY MAX SPOUSAL SURCHARGE MEMBERS FY2026 SURCHARGE AVERAGE EMPLOYEE FY2026 PREMIUM * TOTAL AVERAGE EMPLOYEE FY2026 PAYMENT PERCENTAGE OF MEAN EMPLOYEE FY2026 PREMIUM* $30,400.00 224 $350.00 $196.24 $546.24 52.17% $40,400.00 690 $350.00 $246.41 $596.41 65.51% $46,400.00 375 $350.00 $279.49 $629.49 74.30% $52,400.00 607 $350.00 $313.79 $663.79 83.42% $60,400.00 985 $350.00 $371.23 $721.23 98.69% $72,900.00 998 $350.00 $459.45 $809.45 122.14% $85,400.00 330 $350.00 $502.98 $852.98 133.71% $110,400.00 212 $350.00 $572.90 $922.90 152.30% $135,400.00 69 $350.00 $721.81 $1,071.81 191.89% Unlimited 50 $350.00 $741.88 $1,091.88 197.22% 4,540 $1,707,789.68 $3,296,789.68 * - Does not include spousal surcharge Mean Employee FY2026 Premium $376.17 Total employees in 5 lowest salary tiers who are currently paying the spousal surcharge 2,881 Total employees in 5 highest salary tiers who are currently paying the spousal surcharge: 1,659 FY2026 INDEX TIER SALARY MAX SPOUSAL SURCHARGE MEMBERS AVERAGE EMPLOYEE FY2026 PREMIUM * TOTAL FY26 SURCHARGE BY TIER @ $350 FOR ALL SALARY TIERS RECALCULATED FY26 SURCHARGE PER MEAN EMPLOYEE PREMIUM @ $350 RECALCULATED FY26 TOTAL EMPLOYEE PAYMENT WITH ADJUSTED $350 SURCHARGE $30,400.00 224 $196.24 $78,400.00 $182.59 $378.83 $40,400.00 690 $246.41 $241,500.00 $229.27 $475.68 $46,400.00 375 $279.49 $131,250.00 $260.05 $539.54 $52,400.00 607 $313.79 $212,450.00 $291.96 $605.75 $60,400.00 985 $371.23 $344,750.00 $345.41 $716.64 $72,900.00 998 $459.45 $349,300.00 $427.49 $886.94 $85,400.00 330 $502.98 $115,500.00 $467.99 $970.97 $110,400.00 212 $572.90 $74,200.00 $533.05 $1,105.95 $135,400.00 69 $721.81 $24,150.00 $671.60 $1,393.41 Unlimited 50 $741.88 $17,500.00 $690.28 $1,432.16 4,540 $1,707,789.68 $1,589,000.00 $1,589,000.00 $3,296,789.68 * - Does not include spousal surcharge FY2026 INDEX TIER SALARY MAX SPOUSAL SURCHARGE MEMBERS ESTIMATED AVERAGE EMPLOYEE FY2027 PREMIUM ** PROJECTED FY27 SURCHARGE PER MEAN EMPLOYEE PREMIUM @ $550 PROJECTED FY27 TOTAL EMPLOYEE PAYMENT WITH ADJUSTED $550 SURCHARGE PERCENTAGE CHANGE IN TOTAL EMPLOYEE PAYMENT WITH ADJUSTED SURCHARGE IN FY27 $30,400.00 224 $202.13 $286.93 $489.05 -10.47% $40,400.00 690 $253.80 $360.28 $614.08 2.96% $46,400.00 375 $287.87 $408.65 $696.52 10.65% $52,400.00 607 $323.20 $458.80 $782.00 17.81% $60,400.00 985 $382.37 $542.78 $925.15 28.27% $72,900.00 998 $473.23 $671.77 $1,145.01 41.45% $85,400.00 330 $518.07 $735.42 $1,253.49 46.95% $110,400.00 212 $590.09 $837.65 $1,427.74 54.70% $135,400.00 69 $743.46 $1,055.38 $1,798.84 67.83% Unlimited 50 $764.14 $1,084.72 $1,848.86 69.33% 4,540 $1,759,023.37 $2,497,000.00 $4,256,023.37 Mean Employee FY2026 Premium $376.17 Total employees in 5 lowest salary tiers who are currently paying the spousal surcharge 2,881 Total employees in 5 highest salary tiers who are currently paying the spousal surcharge: 1,659

Memorandum

Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.

Person submitting Fiscal Note: Jason Haught
Email Address: jason.a.haught@wv.gov