Report to the Board: The CAL-PERS Transition

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Presentation transcript:

Report to the Board: The CAL-PERS Transition

Definitions “Legacy plans”– The original insurance plans offered to employees in the District. Still offered to ACE employees. ”Insurance broker” –Offers health insurance plans from others. “Employee monthly contribution”—Cost per month of health insurance plan for an employee. “Out-of-pocket expenses” – What an employee pays for specific health care events not covered by health insurance.

What led to the transition to CAL-PERS. Employee monthly contributions began to spike in 2014. WVMCEA approached Administration to mitigate the employee monthly contributions. The Administration concluded that CAL-PERS as insurance broker would substantially reduce employee monthly contributions.

2013/14 to 2014/15 Legacy Plan Rates* Health Care Plan 2013/14 2014/15 Kaiser $0 $149 PPO $206 $252 HMO $289 $320 *All rates rounded downward to nearest dollar.

3 Criteria for New Plans 1) Similar plans. 2) Lower employee monthly contributions. 3) Long-term sustainability.

The Performance of CAL-PERS in the Last 2 Years. 1) Similar plans. 2) Employee monthly contributions. 3) Long-term sustainability.

Employee Monthly Contribution Comparison—2015 Insurance Plan Legacy Cost CAL-PERS Cost Kaiser $149 12/25/32 PPO (PERS Choice) $252 14/13/12 HMO (Anthem Trad.) $320 141/266/342

Employee Monthly Contribution Comparison—2016 Insurance Plan Legacy Cost CAL-PERS Cost Kaiser $223 44/89/115 PPO $416 112/208/266 HMO $410 141/266/342

Employee Monthly Contribution Comparison—2017 Insurance Plan Legacy Cost CAL-PERS Cost Kaiser $220 0/0/0 PPO $487 59/107/135 HMO $498 219/426/551

Annual Employee Monthly Contributions Legacy Plans 2015 2016 2017 Kaiser $149 $223 $220 PPO $252 $416 $487 HMO $320 $410 $498

Annual Employee Monthly Contributions CAL-PERS Plans 2015 2016 2017 Kaiser 12/25/32 44/89/115 0/0/0 PPO 14/13/12 112/208/266 59/107/135 HMO 141/266/342 169/322/414 219/426/551

Impacts. Plans are similar, not identical. Greater potential out-of-pocket costs. Mitigated by FSA and tax write-offs. Greater need for long-term planning by employees.

The District’s Position Some money saved on less expensive employer contributions, especially to retirees. Savings essentially “passed on” to CAL-PERS participants— raising the cap (this year to 90%). Not a principle, but a very desirable outcome.

Success? The three criteria met. Employee reaction.

One More Thing . . . Plans Legacy Plan (2017) CAL-PERS WVMCCD (2017) FOOTHILL-DEANZA CAL-PERS (2017) Kaiser $220 0/0/0 108/216/324 (amounts as corrected at 1.24.17 BOT meeting) PPO $487 59/107/135 152/304/456 HMO $498 219/426/551 214/428/642