Gov. Brown wants state workers to begin paying half the cost of their
future retiree health care -- a big change for workers making no
payments for coverage that can pay 100 percent of the premium for a
retiree and 90 percent for their dependents. The governor also wants state workers to be given the option of a
lower-cost health insurance plan with higher deductibles. The state
would contribute to a tax-deferred savings account to help cover
out-of-pocket costs not covered by the plan. More funding and lower premium costs are key parts of a plan to
eliminate a growing debt or “unfunded liability” for state worker
retiree health care, now estimated to be $72 billion over the next 30
years...
Undoubtedly, this issue would come up in the proposal by the governor to create a joint governor-UC committee to study cost savings. We have noted in a prior post that right now UC takes the position that retiree health is not a required benefit; it's essentially just a nice thing the university does. If UC moves to pre-funding with employee contributions, it would be harder to maintain the position that it is free to cancel the benefit or make any modification it wants to the program.
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