Jon Ortiz

The State Worker
By Jon Ortiz
jortiz@sacbee.com
June 1, 2015

  • Draft legislation lowers benefits for future hires when they retire
  • Brown bargaining medical coverage terms with unions

Even as Gov. Jerry Brown bargains changes to retiree health benefits with four state-employee unions, his administration has drawn up some unnumbered bills that reveal the governor’s thinking on how to cut those costs long-term.

Here’s a summary of the current benefits and policies and how the bills would change them. Keep in mind that all these are “placeholder” measures pending the outcome of negotiations with the unions. Some apply only to future hires. Others apply to both current and future employees and retirees.

The status quo: The state sets the maximum subsidy for retirees’ health insurance premiums to equal the weighted average of premiums for the four plans with the most active employees enrolled. The state also subsidizes coverage for retirees’ dependents at a lower percentage.

What the bill would do to future employees: Cut the maximum subsidy for retirees and their dependents to 80 percent of the weighted average when employees first hired after Jan. 1, 2016 eventually retire.

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The status quo: The state’s retiree medical subsidy kicks in at half the maximum after 10 years of state service and rises incrementally to 100 percent for 20 years of state employment and beyond.

What the bill would do: Adds five years to the service time threshold to qualify for the minimum subsidy for retirees who start state service Jan. 1, 2016 and later. In other words, state employees hired next year and beyond would have to work 15 years for half the subsidy and 25 years for 100 percent.

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