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University of California
ANR Employees

2025 benefits changes message from UC Systemwide HR Vice President Cheryl Lloyd

Valued colleagues:

As we approach our annual Open Enrollment for health benefits, I want to share what we know about UC's medical plan costs for 2025 and update you on how we're preparing for 2026 and beyond. My goal is to provide information as early as possible so you can make informed decisions about your benefit plans.

The national trends that increased medical costs and medical plan premiums last year have continued. UC's medical plan costs will rise again this year due to increased health care utilization as our population ages and rates of chronic health conditions rise, enhanced benefits, and the rapidly expanding use of costly new drugs and treatments. 

To limit the impact of rising costs on employees and retirees, the decision was made, in consultation with President Drake, EVP-COO Nava and EVP-CFO Brostrom, to increase UC's 2025 contribution to medical premiums by $198M over 2024. Even with this additional contribution from UC, employee and retiree premium contributions will need to increase. 

Budgeting for the high costs of food, housing and child care is already a challenge for many in our community, so any increase is painful. Our people are our most important resource, and the Systemwide Human Resources team has spent the last year working closely with our health plan partners to look for every opportunity to balance the quality of our benefits with their affordability. We've also spent months analyzing how UC can minimize the impact of higher costs in a challenging budget year.

To rise to this challenge, we're focusing on a principle that is central to our mission — the critical importance of health care equity and access. We understand 2024 employee contributions were significantly higher than anticipated and explored multiple options to mitigate increases for 2025. As a result, employees will see no more than an 11% increase (with exception of the CORE plan) in 2025. Additionally, employee contributions will continue to be based on salary, with higher employee contributions and percentage increases for those who earn more. 

Significant Health Plan Changes for 2025

  • With the exception of those enrolled in CORE medical, employees with annual salaries up to $140K a year will see 9% increases in their medical plan premiums and employees with annual salaries over $140K a year will see 11% increases.

These increases are consistent with other public employers in California. For example, CalPERS has announced an overall premium increase of 10.79% for 2025.

Retiree contribution changes for UC's retiree plans are more variable, with UC maintaining its agreement to fund a minimum of 70% of the cost of retiree medical plan premiums.

  • To ensure that the costs of medical coverage are shared fairly, the CORE PPO plan will require an employee premium contribution beginning in 2025. Contributions for CORE will be the lowest of the UC medical plan options, but we know this is a big adjustment for UC employees who have appreciated the option of a plan that did not require a premium contribution. We will do all we can to help those employees understand their choices and consider carefully whether CORE is still the best option for them.
  • To help minimize premium increases, some of the costs for receiving care and filling prescriptions will go up next year. For example, the copay for an outpatient visit will increase from $20 to $30 for members of UC Blue & Gold HMO, Kaiser HMO, UC Care (UC Select/Tier 1), UC Medicare Choice and Kaiser Senior Advantage — the first such increase for these plans in over 10 years. Copays for prescription drugs will go up for most of UC's medical plans, and there will be a new drug tier for specialty drugs that will have 30% coinsurance, up to $150 per prescription, for UC Blue & Gold HMO and Kaiser HMO.

Preparing for 2026 and beyond

We owe it to the UC community to find and take every opportunity to control costs and protect the security and quality of UC's benefits. To this end, we have been working with expert consultants on a large-scale analysis of our overall benefits strategy and priorities. Throughout all our work to ensure UC's benefits meet the needs of our community, we will continue to seek out the counsel and engagement of faculty, staff, retiree and emeriti groups. 

Keeping you informed

Open Enrollment begins on Thursday, October 31, this year. Keep an eye on UCnet and UCnetwork for regular updates, take advantage of your location's Open Enrollment resources and check your mailbox and email inbox for details and reminders. Your benefits and communications colleagues across UC stand ready to keep you informed and help you make the best choices for your needs and the needs of your family. 

Sincerely, 

Cheryl Lloyd
Vice President
Systemwide Human Resources

Posted on Tuesday, October 8, 2024 at 10:53 AM

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