Health Care Liability Estimate Increases
Contra Costa County has unfunded health care liabilities totaling an estimated $2.4 billion -- $300 million more than the county's previous estimate -- according to an independent actuary, the Contra Costa Times reports. The actual unfunded liability is about $2.6 billion when programs with separate funding sources, including the county First 5 program and the Contra Costa Retirement Board, are considered.
The county commissioned the estimate to comply with new federal accounting standards that require state and local governments to calculate the health care costs for future retirees and how much workers have paid into their health care retirement benefits. The new standards take effect in July 2007.
Contra Costa County pays about $35 million annually for retirees' medical, dental and prescription drug benefits.
County Administrator John Cullen said that unless action is taken, costs will continue to rise as health expenses increase, more workers retire and people live longer.
County contract negotiators are asking public employees to work 15 years before becoming eligible for retiree health benefits. Currently workers must hold a position for five years.
In addition, Cullen said the county must establish a fund for future health care costs, similar to its pension fund.
Assistant County Administrator Lisa Driscoll said developing such a fund would take about a year.
The county Board of Supervisors finance committee on Thursday will hear a report on the cost of retiree health benefits (Rosen Lum, Contra Costa Times, 5/2).