ACE members
The Joint Labor-Management Benefits Committee (JLMBC) has reached an agreement regarding employee health benefits for the plan year 2022. The JLMBC is comprised of members from all bargaining units (ACE, CSEA, FA, POA, and Teamsters).
In a nutshell, here are the changes:
- Employee benefit health benefit premiums increase by five percent; CalPERS Choice and Care plans (now combined and called PERS Platinum) will increase by 10 percent. See attached for Play Year 2022 employee contribution rates.
- The District increases their contribution to health benefit premiums, referred to as the Per Employee Per Month (PEPM), by five percent.
- The District will add $1 million to the rate stabilization fund (RSF) if we reach community supported (basic aid) status in 2021-2022. They’ll add $500K if we do not.
- Bridge to Medicare program increases from $400 (employee) and $800 (employee plus one) to $500 and $1000, respectively. If an eligible employee chooses not to use a CalPERS plan, they’ll receive $200 or $400.
- Employee contribution to the Voluntary Employee Benefit Association (VEBA) Trust increases to $10 for all participant tiers.
- All parties agree to participate in a study of benefit plans over the next year to determine if there are other options to reduce costs.
Plan Options
Every year, CalPERS adjusts the plans they offer, and this year is no different. For 2022, the CalPERS has reduced the PPO options to two by restructuring and renaming the Select and Care Plans and eliminating the Choice Plan. PERS Gold (formerly PERS Select) and PERS Platinum (formerly PERS Care) offer the same coverage as those plans did in 2021. All plans will increase employee contribution rates by five percent over the 2021 plan year rates except for the new PERS Platinum PPO, which will increase by ten percent over the 2021 plan year rates for the now-defunct CalPERS Choice PPO.
It is important to remember that the bargaining units and the District negotiate who pays how much based on CalPERS’s plans, but neither has any say in what plans CalPERS offers, the cost of a plan including deductibles, and co-pays, or what practitioners are included in those plans.
PEPM and Rate Stabilization Fund
We can’t argue that health care costs aren’t rising. Last year, the overall increase in premiums was 5.7 percent. The year before, it was 5.3 percent. In the previous five years, the average increase was approximately three percent a year. During that time, we’ve been able to offset increases through the RSF which covers the difference between what employees and the district pay and the actual premium cost. The RSF started with $10 million, this year we will use another $3.4 million, leaving $3.5 million in the fund. To help sustain the fund over the years the bargaining units have been able to negotiate an additional $2.8 million in one-time money and this year we will add another $1 million if we become community-supported, and $500k if we do not. Even with an RSF of $4 or $4.5 mil, one more year of five percent premium increases and the fund will be depleted, leaving a large gap between what employees and the district pay and the actual cost of the plans.
We have also increased the PEPM the District pays towards health benefits by five percent from $1011 to $1,062.
Bridge to Medicare
Bridge to Medicare is a program for employees hired after July 1, 1997, who has retired from the district with 15 years of service and are between ages 55 and 65 to help bridge the cost of health benefits until they are eligible for Medicare. For current CalPERS plans, the subsidy towards the plan’s full cost is increased from $400 (employee) and $800 (employee + one) to $500 and $1000, respectively.
As a trial for 2022, if an eligible retiree chooses a plan outside of CalPERS, the District will contribute up to $200 (employee) or $400 (employee + one) towards the full cost of whatever plan is chosen. The non-CalPERS medical plan must include a monthly premium expense to the retiree that another source cannot cover, for example, another employer.
VEBA
Increased the employee contribution rate to a flat $10 for all plan tiers.
In our annual negotiations survey, 70 percent were in favor of increasing the employee contribution to a flat rate of $10 per month which would generate a little over $200,000 per year vs. its current annual revenue of $78,000.
Eligibility is based on three factors for anyone hired on or after July 1, 1997:
- You worked at least half-time as a regular employee and were eligible to enroll in the District’s active health coverage for 15 years or more prior to your retirement; and,
- You separated from employment as a regular employee in any position for which you were eligible to enroll in District active health coverage, regardless of whether you have retired (service or disability) from PERS or STRS; and,
- You are Medicare-eligible and have enrolled in and begun receiving Medicare coverage and have paid a premium for Medicare coverage.
The current VEBA benefit is $100 per month. When Medicare debuted in 1966, the standard Part B premium was $3 per month. For 2021, the standard Part B premium is $148 per month. Although there have been some stretches of time when the premium declined from one year to the next or remained steady – 2013 through 2015, for example, when it was $104.90/month each year – it has generally increased every year. Today, over 90 percent of ACE members were hired after July 1, 1997, and in two years nearly 50 percent will be eligible for this benefit.
Benefits Study
All participants have agreed to a study of benefit plans over the next year as another way to help contain costs. Are there plan providers more affordable than CalPERS?
Open enrollment
Open enrollment materials from the District will be sent in mid-September with plan changes being implemented on January 1, 2022.
Of service,
Chris
