2012/13 Supplemental Documentation

Uses of Revenue

2012/13 Health Care Premium Increase, $15.1 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 2012/13 CSU budget plan includes $15.1 million to fund the base increase in employer-paid health care costs resulting from changes in premiums, effective January 2012. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2008 through 2012:

Government Code Health Care Monthly Employer Contribution Rates
Eligible
Dependents
2008 2009 2010 2011 2012 Five-Year Increase
% $ Amount
Employee
Only
$471 $478 $493 $542 $566 20.2% $95
Employee
+ 1 dependent
$886 $909 $936 $1,030 $1,074 21.2% $188
Employee
+ 2 or more
$1,129 $1,167 $1,202 $1,326 $1,382 22.4% $253

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 $91.4 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)
2008 7.9% 21,755,000
2009 2.7% 8,484,000
2010 3.0% 9,700,000
2011 10.2% 36,407,000
2012 4.3% 15,086,000
5-Year Increase in CSU Health Care Costs $91,432,000

The 2012/13 budget request funds permanent base budget costs associated with January 2012 employer health care premium increases. The CSU must absorb approximately $7.5 million during fiscal year 2011/12 to fund the one-time costs related to the January 2012 premium increases for the six-month period from January-June 2012.