2015/16 Supplemental Documentation

Uses of Revenue

Health Care Premium Increase, $11,040,000

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 2015/16 CSU budget plan includes $11 million to fund the base increase in employer-paid health care costs resulting from changes in premiums effective January 2015. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2011 through 2015:

Government Code Health Care Monthly Employer Contribution Rates

Eligible
Dependents

2011

2012

2013

2014

2015

Five-Year Increase
 
%
$
Employee
Only
$542 $566 $622 $642 $655 20.8% $113
Employee
+ 1 dependent
$1,030 $1,074 $1,183 $1,218 $1,246 21.0% $216
Employee
+ 2 or more
$1,326 $1,382 $1,515 $1,559 $1,605 21.0% $279

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 $111 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)
2011 10.2% 36,407,000
2012 4.3% 15,086,000
2013 9.8% 36,226,000
2014 3.0% 12,066,000
2015 2.6% 11,040,000
5-Year Increase in CSU Health Care Costs $110,825,000

The 2015/16 budget request funds permanent base budget costs associated with January 2015 employer health care premium increases. The CSU must absorb approximately $5.5 million during 2014/15 to fund the one-time costs related to the January 2015 premium increases for the six-month period from January-June 2015.