Uses of Revenue
2010/11 Health Care Premium Increase, $9.7 Million
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 2010/11 CSU budget plan includes $9.7 million to fund the base increase in employer-paid health care costs resulting from January 2010 premium increases. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2006 through 2010:
Government Code Health Care Monthly Employer Contribution Rates
| Eligible Dependents |
2006 | 2007 | 2008 | 2009 | 2010 | Five-Year Increase % $ Amount |
|
|---|---|---|---|---|---|---|---|
| Employee Only |
$394 | $439 | $471 | $478 | $493 | 25.1% | $99 |
| Employee + 1 dependent |
$738 | $823 | $886 | $909 | $936 | 26.8% | $198 |
| Employee + 2 or more |
$933 | $1,042 | $1,129 | $1,167 | $1,202 | 28.8% | $269 |
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 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 $86.7 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) |
|---|---|---|
| 2006 | 8.7% | 18,709,000 |
| 2007 | 11.6% | 28,034,000 |
| 2008 | 7.9% | 21,755,000 |
| 2009 | 2.7% | 8,484,000 |
| 2010 | 3.0% | $9,700,000 |
| 5-Year Increase in CSU Health Care Costs | $86,682,000 | |
The 2010/11 budget request funds permanent base budget costs associated with January 2010 employer health care premium increases. The CSU plans to absorb approximately $4.85 million during fiscal year 2009/10 to fund the one-time costs related to the January 2010 premium increases for the six-month period from January-June 2010.
