Contra Costa County Takes Aim at Retiree Health Costs
The Contra Costa County Board of Supervisors on Tuesday voted to set aside $588 million over the next 16 years to help reduce the county's liability for retiree health care costs, the Contra Costa Times reports. The money will come from redirected payments that are set to expire in the ensuing years.
New federal accounting rules require public agencies to disclose the future costs of retiree health care benefits. The county currently pays for the benefits on an annual basis.
The county over the next 30 years faces a $2.6 billion liability for funding retiree health care benefits -- the equivalent of five major California counties combined. The liability will grow because it does not account for health care costs for future employees.
The supervisors also agreed to fund 40% of the remaining $2 billion liability, leaving the balance to be paid in future years.
John Cullen, county administrator, will negotiate several options with labor unions to help the county reach the 40% goal, including:
- Freezing the county's subsidy for premiums, a move that would require retirees to pay for all rate increases; and
- Laying off more than 1,000 employees to help reduce costs.
Supervisors will meet again in August to discuss retiree health care costs (Huff, Contra Costa Times, 6/27). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.