BACKGROUND
On August 10, 2021, this Board adopted Resolution No. 5236 approving the Successor Memorandum of Understanding (MOU) with Public Employees Union, Local #1/AFSCME (Union), providing for wages, non-healthcare benefits, and other employment conditions for the term of July 1, 2021, through June 30, 2024. Similarly, on September 14, 2021, this Board adopted Resolution No. 5237 regarding compensation and non-healthcare benefits for the unrepresented employees of the Housing Authority of the County of Contra Costa.
On June 29, 2021, a Tentative Agreement with the Union was signed that included a change to the health care subsidy paid by HACCC from a flat amount to a percentage payment. Specifically, the TA provided that HACCC will pay the following percentages of the premium for the CalPERS Kaiser Premium plan, towards all health plans offered by CalPERS:
- 64% Effective January 1, 2022
- 67% Effective January 1, 2023
- 70% Effective January 1, 2024
Any excess amounts necessary to pay the health care premium in full shall be paid for by the Employee through payroll deductions. The proposed change to the health care subsidy was not included in either the Successor MOU or the compensation package for unrepresented employees, because HACCC was awaiting an actuarial analysis of the change as required by State law.
As required by California Government Code section 7507, the actuarial report that considered the future costs of changes in retirement benefits, or other post-employment benefits was provided to this Board at the November 9, 2021, meeting. This meeting was more than two weeks ago, so it is appropriate to consider adoption of the proposed health care benefit changes for current employees and current and future retirees who are eligible for health care coverage at today’s meeting. HACCC’s Actuary will be in attendance if there are any questions about the report.
FISCAL IMPACT
As shown in the attached actuarial valuation, the result of the health care plan changes described herein, if implemented for all current and future eligible retirees, will create a $368,000 increase in the Annual Required Contribution, a $128,090 increase in the Normal Cost, and a $2.9 million increase in the total Actuarial Accrued Liability.
CONSEQUENCE OF NEGATIVE ACTION
It is expected that the Union will seek to reopen negotiations concerning health care reimbursements.