Uses of Revenue
2011/12 Health Care Premium Increase, $36.4 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 2011/12 CSU budget plan includes $36.4 million to fund the base increase in employer-paid health care costs resulting from January 2011 premium increases ($32.7 million) and mandated Federal Health Care Reform that extends health coverage to dependents up to age 26 ($3.7 million). The following chart indicates the Government Code (employer-paid) health care contribution increases from 2007 through 2011:
Government Code Health Care Monthly Employer Contribution Rates
% $ Amount
+ 1 dependent
+ 2 or more
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 $104.4 million.
5-Year Increase in Health Care Costs
|Government Code Health
|5-Year Increase in CSU Health Care Costs||$104,380,000|
|1Includes health care coverage to dependents up to age 26, effective January 1, 2011 pursuant to Health Care Reform Act HR 3590 and Reconciliation Act HR 4872 signed by President Obama on March 2010.|
The 2011/12 budget request funds permanent base budget costs associated with January 2011 employer health care premium increases. The CSU plans to absorb approximately $18.2 million during fiscal year 2010/11 to fund the one-time costs related to the January 2011 premium increases for the six-month period from January-June 2011 and new Federal legislation.