CalPERS Expects To Cut Costs by $200M Through Reform Law Program

CalPERS recently announced that it expects to reduce spending by about $200 million through participation in the federal health reform law's early retiree reinsurance program, the Sacramento Business Journal reports.

The reinsurance program will provide businesses, unions and purchasing pools with partial reimbursements for the medical costs of retirees older than age 55 who do not qualify for Medicare.

Federal officials approved CalPERS' application for the program in early September. Starting this month, approved applicants can submit claims from as far back as June 1. Reinsurance payments are slated to begin arriving in October and last until state health insurance exchanges begin operating in 2014.

CalPERS said its premiums for 2011 -- which will increase by an average of 9.1% -- reflect the anticipated savings from the reinsurance program (Robertson, Sacramento Business Journal, 9/20).

Investigation of Compensation for CalPERS' Board

In related news, a new Associated Press investigation found that CalPERS awarded its top employees with significant raises and bonuses at the same time that the pension system lost nearly one-quarter of its value, the AP/San Diego Union-Tribune reports.

CalPERS officials said the system was contractually bound to pay the bonuses, which were lowered from the previous fiscal year and based on the fund's performance over five years (Bussewitz, AP/San Diego Union-Tribune, 9/21).