CalPERS Committee Delays Decision Over Changes to Rating Regions

On Tuesday, the CalPERS Pension Health Benefits Committee delayed for one month a decision over whether to change the pension fund's rating regions, the Sacramento Business Journal reports (Robertson, Sacramento Business Journal, 3/18).

Background

Ten years ago, CalPERS began a regional rating system to ensure that public agencies in less-costly areas participate in the pension program.

However, public agency growth in the program for 2014 was less than a third of the net gain in 2010.

In response, CalPERS evaluated county costs and developed three potential plans to more accurately reflect geographic discrepancies in health care costs:

• The first proposal would shift three Sacramento-area counties into the current Bay Area region;
• The second proposal would shift six lower-cost Bay Area counties into the Sacramento region; and
• The third proposal would not shift any counties in the regions (California Healthline, 3/18).

Details of Hearing

During a committee hearing Tuesday on the proposed changes, public agencies in Yolo County testified that they want to be moved out of the Bay Area's rating region.

Sheila McShane, human resources manager of Woodland, said, "We are subsidizing Bay Area employers by paying higher premiums while they get Sacramento-area rates."

Phil Wright -- director of administrative services in West Sacramento, which draws workers from Sacramento and Yolo counties -- said, "Yolo County employees go to the same doctors and hospitals as employees in Sacramento."

However, Ann Boyton -- CEO for benefit programs, policy and planning at CalPERS -- said that moving some counties from the Sacramento region to the Bay Area region could result in a 3% increase in premiums. Boyton added, "There is no reason to rush into a decision for the 2015 rate year" (Sacramento Business Journal, 3/18).