Posts Tagged: Benefits
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
Emergency support From UC’s benefit plans
Dear Colleagues,
As wildfires continue to burn in Southern California, I'd like to remind you of the support available from UC's benefit plans for those of you impacted by the fires: http://ucnet.universityofcalifornia.edu/news/2017/12/emergency-support-from-ucs-benefit-plans.html.
I hope you all have a safe weekend.
John Fox
Executive director, Human Resources
View or leave comments for ANR Leadership at http://ucanr.edu/sites/ANRUpdate/Comments.
This announcement is also posted and archived on the ANR Update pages.
CUCSA reviews post-retirement health update changes
Colleagues,
As your delegates to the Council of UC Staff Assemblies (CUCSA), we would like to share information on an issue that was addressed at our September meeting in San Diego last week. The issue concerns post-retirement health benefits and potential changes that have not been widely shared. CUCSA chair Lina Layiktez provided the summary below and links for more information.
What is the change to post-retirement health benefits that is being proposed?
The proposed action item for the July 2017 Regents meeting was to remove the 70 percent floor on the UC contribution to retiree health benefits and place a cap of 3 percent on year-over-year increases to UC costs. This is a policy change to offset the accounting rule changes required in "GASB 75." GASB 75 requires that the full actuarial value of other postemployment benefits (OPEB) be included on the systemwide balance sheet. This means that UC will have a perceived “new” liability of $21 billion, which would affect the system's overall credit rating. A hit to the UC's credit rating has obvious impacts to financing for the university.
The “new” GASB 75 requirement definition is subject to interpretation, since it was already a liability that was disclosed in previous year's financials. The value of this liability under current assumptions/retiree rules is approximately $21 billion. The current assumptions are being driven by the number of retirees in the system plus the number of potential retirees (active staff and faculty) and how much it would cost the system in health-care costs should the current employees retire today.
What does this all mean?
By removing the floor and capping UC's costs, the university effectively transfers rising health-care premiums to retirees. The assumed rate of health-care cost increase is 7 percent. Over the course of 20 years this would flip the proportion that UC pays to ~30 percent and the retiree to ~70 percent. The 70 percent floor was designed to provide some stability to retiree health-care costs.
What do we see happening?
Many UC employees choose to retire after calculating their retirement income. This is necessary because, except for Cost of Living Adjustments (COLA), there is no way for retirees to increase their income from the university. So when out-of-pocket health-care costs go up for retirees, this eats into their living expenses. There are already retirees and survivors of retirees who have to choose between health-care costs and food. To suddenly remove the 70% floor exacerbates this problem.
What can you do?
The campus staff assemblies are collecting feedback locally and sharing this up to the Council of UC Staff Assemblies (CUCSA), who will be coordinating a response to the UC President and/or Board of Regents. We are also working on a list of questions that include queries, such as what OPEB would look like if it grandparented current employees and implemented the changes to future retirees? What does this mean for retention of employees with 10 to 20 years of service?
The most powerful and helpful thing for us now is to hear about your personal concerns and how this impacts you. Would no OPEB mean you are less likely to retire from the UC system and take a job elsewhere for more money now? Will you have to postpone your retirement if, in retirement, you will have to pay a greater portion of your OPEB than you had planned for under the current plan?
Share your questions and stories with us on the UC ANR Staff Assembly website.
What's next?
Fortunately, the July agenda was revised and this item was moved to the November meeting agenda. Moving the item to November will allow for more consultation and discussion. It is unknown what approach the UC Office of the President (OP) will take to solicit feedback and engage in discussion. But as that information becomes available, we will make sure to share it broadly. We are hopeful that CUCSA (and therefore a voice of staff) will be included in the discussions and that OP will convene a task force representing all parties that will be affected by the proposed changes. Stay tuned.
Click here for the original July Regents Meeting Agenda Item (F7), which was then revised to remove the discussion on the 70 percent floor.
The immediate past chair of the systemwide Academic Senate, Jim Chalfant, has already written a letter to the President on this issue. You can read it online here: http://senate.universityofcalifornia.edu/_files/reports/JC-JN-Retiree-Health.pdf.
We can work collectively to inform and educate staff on this important matter. We are stronger together and the more voices that participate, the louder the message will be to those making the decisions that affect all of us.
UC ANR human resources director John Fox also said one important point that isn't addressed in the CUCSA summary is Medicare coverage. “When a UC retiree enrolls in Medicare, the monthly medical premium costs are significantly reduced (both for the retiree and for UC). Much of the future liability that UC is trying to control (and the risk of high monthly costs for the retirees) is during the time between retirement from UC and the start of Medicare eligibility (typically age 65).”
If you would like to share your stories or post a comment on this proposed change, please fill out the form on the UC ANR Staff Assembly website. We will share comments and stories from UC ANR with CUCSA leadership, who will compile it with information from other campuses to share with the UC President and UC Regents.
Sincerely,
Jeannette Warnert, UC ANR senior delegate to CUCSA
LeChé McGill, UC ANR junior delegate to CUCSA
View or leave comments for ANR Leadership at http://ucanr.edu/sites/ANRUpdate/Comments.
This announcement is also posted and archived on the ANR Update pages.
Open Enrollment ends Tues., Nov. 24 at 5 p.m.
This is a final reminder to make any changes to your 2016 UC benefits before 5 p.m. Tues., Nov. 24, when Open Enrollment closes.
Visit the Open Enrollment website for details on UC benefits and 2016 plan changes. Then sign in to your account to make changes using the Open Enrollment application.
View or leave comments for ANR Leadership at http://ucanr.edu/sites/ANRUpdate/Comments.
This announcement is also posted and archived on the ANR Update pages.
Recording of Health Benefits Open Enrollment webinar online
For anyone who missed the webinar given by Gil Sebastian on Tuesday, Gil has recommended a narrated presentation on UC medical plans that provides the same information. To those of you who joined us for Tuesday’s benefits webinar, thank you for bearing with us. We apologize for technical difficulties with the audio during the beginning of the call. We know we lost some participants.
To access the recorded presentation, visit www.hr.ucdavis.edu/benefits/1hw/hcf/presentations. Go to the section titled “Presentations for Employees.” Under “Streaming video,” you can watch all six parts or just the part that interests you.
If you cannot find answers to your questions on the At Your Service website or the carrier websites, you may also direct questions to Gil at gasebastian@ucdavis.edu. The UCD Benefits Department is extremely busy during this open enrollment period – but you may contact the employee benefits staff Monday-Friday 8:30 am – 12:30 pm at (530) 752-1774.
View or leave comments for ANR Leadership at http://ucanr.edu/sites/ANRUpdate/Comments.
This announcement is also posted and archived on the ANR Update pages.