CalPERS Votes To Move Yolo County to Sacramento Rating Region

On Wednesday, the CalPERS Board of Administration voted to move Yolo County from the Bay Area health plan rating region to the Sacramento region beginning in 2015, the Sacramento Business Journal reports. The move goes against recommendations by the pension fund's Pension & Health Benefits Committee (Robertson, Sacramento Business Journal, 4/16).

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 (California Healthline, 3/19).

Details of Decision

On Tuesday, the Pension & Health Benefits Committee recommended that CalPERS make no changes to the rating system for public agencies for a least one more year.

During the meeting, board members originally considered shifting six lower-cost Bay Area counties into the Sacramento region, but the proposal failed. Board member Bill Slaton then proposed moving just Yolo County, which the board passed by a 9-2 vote.

Implications

According to the Business Journal, moving Yolo County to the Sacramento region will cut premiums by 15% for public agencies and their workers beginning next year. In addition, the move could increase Bay Area health plan premiums by 3%. However, officials noted that those estimates could change.

After the vote, some Yolo county employees said they would look for alternative benefits options, including possibly pulling out of the CalPERS program (Sacramento Business Journal, 4/16).