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Health Care Premium Increase

$12,029,000​​​​​​

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 2018-19 CSU budget plan includes $12.0 million to fund the base increase in employer-paid health care costs resulting from changes in premiums effective January 2018. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2013 through 2018:​

Government Code Health Care Monthly Employer Contribution Rates​

​Eligible Dependents ​ ​2014 ​ ​2015 ​ ​2​​016 ​ ​2017 ​ ​2​018 ​ ​Five-Y​ear Increase ​
​ % ​$
​Employee Only​$642​$655​$705​$707​$72516.6%​$103
​Employee + 1 dependent$1,218​​$1,246​$1,343​$1,349​$1,377​16.4%​$194
​Employee + 2 or more$1,559​​$1,605​$1,727​$1,727​$1,766​16.6%​$251

 

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 $71 million.

Five-Year Increase in Health Care Costs

Calend​ar Year
(Contract Period)​
Government Code Health​ 
(Employer-Paid Budget Increase)
CSU Annualized Health Care
Budget Increase​
20143.0%$12,066,000
20152.6%11,040,000
20167.7%35,080,000
20170.2%912,000
20182.3%12,029,000
5-Year Increase in CSU Health Care Cos​ts:$71,127,000

​ 

The 2018-19 budget request funds permanent base budget costs associated with January 2018 employer health care premium increases. The CSU must absorb approximately $6.0 million during 2017-18 to fund the one-time costs related to the January 2018 premium increases for the six-month period from January-June 2018.​