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SMC Employees' Health Premiums Cut by $1.1 Million

Members of the college's classified employees union vote to ratify a new collective bargaining agreement.

Members of ’s classified employees union recently voted to ratify a new collective bargaining agreement that aligns the health care program for classified employees with the one previously adopted for SMC managers and trustees.

The Oct. 12 action reduces health care premium costs by $1,097,365 in 2012 compared to the previous plan.

The college’s managers and trustees switched over to the new program in 2011, reducing health premiums by an estimated $790,000 for the two years combined.

“Rising benefit costs are increasingly a problem for institutions like SMC,” according to SMC’s Vice President of Human Resources Marcia Wade. Benefits have risen from 12.5 percent of the college’s general fund in 2002 to 20.7 percent in 2011. And in June, CalPERS, the college’s health care provider, announced that premiums for PERS Care, the most expensive health plan offered by SMC, will increase 15.14 percent in 2012, one of the largest increases ever.

The new and less expensive program adopted by the classified employees union, known as PERS Choice, preserves the same network of health care providers and covers the same medical conditions as PERS Care, but includes a slightly higher annual maximum for the employee’s out-of-pocket payments for health services. As a result, SMC is able to continue to afford a range of health care options for employees and their dependents with no employee contribution to health premiums, Wade said.

The new agreement calls on the college to help employees transition to the new plan by providing each classified employee with a one-time Health Reimbursement Account, or HRA.

“With health expenses reduced, the college has restored class sections,” reports , “with more than 200 new classes added by the college in the past few weeks.”

Negotiations are ongoing between the college and the faculty collective bargaining unit to secure a similar agreement on benefits to take effect in 2013.

Statewide, enrollments in the more expensive PERS Care health plan have been in a decade-long decline, dropping from 14,682 active enrollments in 2002 to only 6,229 in 2010. The Los Angeles Community College District, with 3,458 full-time employees, switched over to the less expensive program in 2009.

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