CalPERS Set To Pay Local Agencies $13M in Rx Drug Coverage Subsidies
On Wednesday, CalPERS announced that it will provide about $13 million in Medicare subsidies to cities, counties, schools and nonstate government agencies that provide retiree drug coverage through a CalPERS health plan, the Sacramento Business Journal reports (Sacramento Business Journal, 4/24).
Under the 2003 Medicare law, the federal government provides tax-free subsidies to employers equal to 28% of annual prescription drug costs for retirees, provided that employers offer coverage equal to the prescription drug benefit to retirees who are eligible for Medicare (California Healthline, 1/24/07).
CalPERS said it would provide the funds based on a formula that considers each agency's individual contribution to annual health premiums.
CalPERS said that distribution of the subsidies will begin as soon as it determines how it will coordinate payments with the State Controller's Office and the local agencies that will receive the payments (Sacramento Business Journal, 4/24).