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 2019-20 CSU budget plan includes $7.3 million to fund the base increase in employer-paid health care costs resulting from changes in premiums effective January 2019. The following chart indicates the Government Code (employer-paid) health care contribution increases from 2014 through 2019:
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 $66 million.
The 2019-20 budget request funds permanent base budget costs associated with January 2019 employer health care premium increases. The CSU must absorb approximately $3.7 million during 2018-19 to fund the one-time costs related to the January 2019 premium increases for the six-month period from January-June 2019.