2016/17 Supplemental Documentation

Uses of Revenue

Health Care Premium Increase, $35,080,000

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 2016/17 CSU budget plan includes $35.1 million to fund the base increase in employer-paid health care costs resulting from changes in premiums effective January 2016. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2012 through 2016:

Government Code Health Care Monthly Employer Contribution Rates

Eligible
Dependents

2012

2013

2014

2015

2016

Five-Year Increase
 
%
$
Employee
Only
$566 $622 $642 $655 $705 24.60% $139
Employee
+ 1 dependent
$1,074 $1,183 $1,218 $1,246 $1,343 25.00% $269
Employee
+ 2 or more
$1,382 $1,515 $1,559 $1,605 $1,727 25.00% $345

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 more than $109 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)
2012 4.30% 15,086,000
2013 9.80% 36,226,000
2014 3.00% 12,066,000
2015 2.60% 11,040,000
2016 7.70% 35,080,000
5-Year Increase in CSU Health Care Costs $109,498,000

The 2016/17 budget request funds permanent base budget costs associated with January 2016 employer health care premium increases. The CSU must absorb approximately $17.5 million during 2015/16 to fund the one-time costs related to the January 2016 premium increases for the six-month period from January-June 2016.