2013/14 Supplemental Documentation

Uses of Revenue

Health Care Premium Increase, $36,226,000

The California Public Employees' Retirement System (CalPERS) administers CSU employee health care benefits. Health care premiums are shared between the CSU and its employees, with the CSU funding a significant portion of the costs. The 2013/14 CSU budget plan includes $36.2 million to fund the base increase in employer-paid health care costs resulting from changes in premiums effective January 2013. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2009 through 2013:

Government Code Health Care Monthly Employer Contribution Rates
Eligible
Dependents
2009 2010 2011 2012 2013 %   
  Change
$    
Increase
Employee
Only
$478 $493 $542 $566 $622 30.1% $144
Employee
+ 1 dependent
$909 $936 $1,030 $1,074 $1,183 30.1% $274
Employee
+ 2 or more
$1,167 $1,202 $1,326 $1,382 $1,515 29.8% $348

The CSU is governed by Government Code Section 22871 that defines the way employer-paid health care contribution rates are calculated. Either through policy or collective bargaining agreement, the CSU covers health care costs for represented and non-represented employees up to an amount equivalent to the established Government Code rates, with the exception of Unit 6 (Skilled Crafts), which bargained for CSU employer health contribution rates slightly above Government Code rates.

The total increase in CSU health care costs due to contribution changes during this five-year period is nearly $106 million.

5-Year Increase in Health Care Costs
Calendar Year
(Contract Period)
Government Code Health
(Employer-Paid
Budget Increase)
CSU Annualized
Health Care
(Budget Increase)
2009 2.7% 8,484,000
2010 3.0% 9,700,000
2011 10.2% 36,407,000
2012 4.3% 15,086,000
2013 9.8% 36,226,000
5-Year Increase in CSU Health Care Costs $105,903,000

The 2013/14 budget request funds permanent base budget costs associated with January 2013 employer health care premium increases. The CSU must absorb approximately $18.1 million during fiscal year 2012/13 to fund the one-time costs related to the January 2013 premium increases for the six-month period from January-June 2013.