Tuesday, February 3, 2015

Too Tier-full?

UC already has a two-tier arrangement with its pension plan.  New hires get a lower benefit than incumbent employees under such arrangements.  The governor is pushing for a two-tier approach regarding state employees' retiree health plans. He also wants a high-deductible plan to be offered to employees and retirees.

The plans were posted with who-pays-what left blank, presumably to be negotiated. It clearly includes CalPERS-covered workers. UC is not mentioned in one of the documents but the coverage statement in Section I(d) says coverage is not limited to named groups of workers and would include anyone employed by a "state entity."  See

Even if UC is not covered, there would be pressure on the university to track what happens to other state employees.  The new plan is summarized in the State Worker blog of the Sacramento Bee:

Employees’ health benefits
What it does: Requires CalPERS to offer a high-deductible health insurance plan that would take effect Jan. 1, 2016, plus a low-cost Medicare-supplement plan for retirees.
Also mandates a new, unspecified cash contribution for retiree-insurance benefits that employers and employees would split. Authorizes the Department of Human Resources to set up and administer a health savings account plan for state workers.
Who would be affected: Taxpayers who would have to ante up millions of dollars each year to prefund retiree benefits. Current and future employees would have to pay their share. Current retirees could see their their insurance subsidy decline by an unknown amount if enough state workers took the high-deductible plan to pull down the average cost the state uses to calculate post-employment medical benefits...

Future employees’ health benefits
What it does: Reduces by an unspecified amount the state’s share of retiree health insurance for employees hired by the state on Jan. 1, 2016 and later. Also requires they work 15 years to qualify for 50 percent of the state’s retiree-insurance subsidy, up to 25 years for 100 percent of the benefit. Right now, employees reach the threshold for half the subsidy at 10 years and earn the max at 20 years.
Who would be affected: Future state workers under gubernatorial control, California State University employees, legislative employees and judicial-branch employees...
Read more here:

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