2010/11 Executive Summary

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.