Agenda

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D.4

To:	Contra Costa County Housing Authority Board of Commissioners
From:	Joseph Villarreal, Housing Authority
Date:	February 10, 2015

Contra

Costa

County

Subject:

Side Letters With Local #1 To Allow the Housing Authority to Provide Health Insurance Via CalPERS

Action of Board On: 02/10/2015

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

Contact:

925-957-8028

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: February 10, 2015
,

BY:	, Deputy

RECOMMENDATIONS

ADOPT Resolution No. 5184 approving the Side Letters between the Housing Authority and Public Employees Union Local #1 for their Maintenance and Clerical Units, modifying Sections 23 "Benefits" and Section 39 "Health Benefits Reopener" of the current Memorandum of Understanding (January 1, 2013 – December 31, 2015) to allow the Housing Authority to provide health insurance via CalPERS effective April 1, 2015;


ADOPT Resolution No. 5185 to allow the Housing Authority to provide health insurance via CalPERS to unrepresented and exempt employees effective April 1, 2015;

RECOMMENDATIONS (CONT'D)

AUTHORIZE the Executive Director to execute the Side Letters with Public Employees Union Local #1 on behalf of the Housing Authority.

BACKGROUND

In 2008, the HACCC capped the amount it provides to employees to help pay for medical and dental coverage. Since that time staff have seen health insurance costs for a family rise by 312.8%. All of this increase has been absorbed by staff. Both the overall cost of HACCC's health care plans and the amount of increases are greater than other local agencies the Committee looked at. In response to this dramatic increase in health care costs and the discrepancies in overall costs, HACCC and Local #1 formed a Health Benefits Labor-Management Committee.

The Committee began meeting on November 9, 2010 in order to determine why the HACCC's costs and increases were so high, as well as to explore alternative health care options. The Committee met with Kaiser representatives and other insurers and brokers in this effort. It was determined that the health care costs for HACCC's employees were driven by overall age (12.1 years older than the average Kaiser pool in HACCC's agency class), high current usage and high anticipated future usage. As long as HACCC is purchasing health insurance directly, rates will be driven upward by these factors. Switching insurers or brokers will not change this. In order to lower overall health care rates, HACCC will need to join a large pool.

CalPERS is among the largest, if not the largest, such pool available to HACCC. With over 1.3 million participants, the negative factors that have driven HACCC's health care costs will have no impact. Switching to CalPERS will result in significant annual savings for staff members who purchase health insurance through HACCC.

The proposed side letters and both resolutions are attached.

FISCAL IMPACT

The Housing Authority (HACCC) is not increasing its contribution to health costs. Based on current participation rates, HACCC may realize a small savings in monthly costs. Employees who participate in HACCC's health plan will see a significant savings.

CONSEQUENCE OF NEGATIVE ACTION

Should the Board of Commissioners elect not to adopt Resolution Nos. 5184 and 5185, HACCC employees would continue to pay excessively high health insurance premiums for coverage.