COMMUNITY COLLEGES’ EXPERIENCES CONTRACTING WITH CALPERS FOR HEALTH BENEFITS

Report from the VCCCDRA Benefits Committee

     The following are comments from the experiences reported by the Human Resources Offices of eight Community College Districts and Cal Poly, San Luis Obispo which expose a variety of difficulties the District and Retirees are going to encounter trying to work with CalPERS.  The points made are self-explanatory and the common denominator is the pervasive, critical displeasure and aggravation experienced in working with CalPERS once a Resolution (Contract) has been signed.

The report also summarizes insights into why CalPERS states that at least 32 Employers terminated their contracts with CalPERS in the last four years.

In the Chancellor’s 5-11-20 packet of materials to be sent to all Retirees is a response to “Areas of Concern” noted in the 80 plus letters of appeal and protest sent by Retirees to Trustees and the Chancellor in late April.  “Concern” number 8 is much more significant than the number of letters which raised it, especially for the number of older Retirees in the VCCCD retired population, namely “The change to CalPERS will cause problems that Retirees are not prepared to manage”.

The Chancellor’s response…

“CalPERS can be contacted through phone, email, and the website.  In addition, District HR personnel and our Burnham representatives can assist with questions in order to facilitate getting needed help.  The District will work with the retirees to provide medical benefits according to the plan requirements of the negotiated provider specified in the Agreements with the Unions.  The District will meet its contractual obligations to our active and retired employees.”

should be true, as a given, but compared to the reports of sister Community College Districts, and their experiences with CalPERS, the response is unfortunately unrepresentative of reality.

LOS ANGELES COMMUNITY COLLEGE DISTRICT

• • • Supplemental tech staff is crucial to field questions and work with specific plans as each presents their own set of problems.  LACCD has 15 techs.
    • CalPERS communication is very difficult because there is no dedicated health insurance liaison between CalPERS and any contracting institution.
    • There is only one source phone number to call and that number is the same for all participants.
    • Messages or trouble shooting usually takes 2-3 weeks for a call back.

FOOTHILL-DEANZA COMMUNITY COLLEGE DISTRICT

• • • Would like to move away from CalPERS due to rising premium and coverage element costs and no ability to negotiate cost changes.
    • Problems with “value based purchasing” costs with businesses in different geographical boundaries.
    • Problems with balance billing when a member is treated in in-network hospital by out-of-network doctor.
    • Initial Resolution Contract is very tricky to understand (i.e. CalPERS had deftly created wording which hid the fact that surviving dependents would be excluded from coverage).  College has had to absorb substantial costs for survivor benefits they had promised and believed would be covered as intimated in initial discussions between the District and CalPERS.

SAN MATEO COMMUNITY COLLEGE DISTRICT

• • • Went from Anthem to CalPERS when college faced financial difficulty and did not have adequate reserves.  Accepted $10 million offer from CalPERS to shift.
    • Are now back to drawing down reserves again due to continued CalPERS premium increases and the fact that there is no negotiability or approval process for the District with CalPERS decisions.
    • Have had to hire four Human Resources employees to work through differing plans, policies, and issues.
    • Difficult to communicate with CalPERS as you cannot speak to the same person and it takes a while for them to get back.  No one seems to know how to handle issues.  (i.e. It recently took three months to successfully transfer a faculty already in CalPERS from another Community College to San Mateo.  meanwhile the new faculty member had to pay medical and prescription bills and had difficulty being reimbursed).
    • Would like to return to Anthem but it is expensive to leave CalPERS because of financial penalties.

SANTA MONICA COMMUNITY COLLEGE DISTRICT

• • • Are attempting to leave CalPERS but it is difficult to do so because of terms of Resolution Contract.  To contract with CalPers you must hire attorneys who understand CalPERS and the health care system to work through the loopholes and “traps’ CalPERS puts into its Resolutions.  District lawyers are not prepared for the task.
    • Plan terms of use and payment are dictated by geographical area.  The costs for different people in the same plan will differ based on the geographical area where they live.
    • District has no control over the plan structure or benefits.
    • There is no dedicated contact person to work with the staff or covered employees and you talk to someone different every call.
    • There is no communication from CalPERS to the client base, should issues arise, that could affect many members.
    • CalPERS may know about an issue affecting an employee(s) but does not notify until the issue comes from the member.

OHLONE COMMUNITY COLLEGE DISTRICT & NORTH ORANGE COUNTY COMMUNITY COLLEGE DISTRICT

Both left CalPERS due to rising premium costs, dissatisfaction with service, and no control.

KERN COUNTY COMMUNITY COLLEGE DISTRICT

• • • Left CalPERS to contract with Self Insured Schools of California (SISC).
    • CalPERS did not fit the District needs or those of groups within the District.
    • Cost adjustments were too high and there was no ability to negotiate.
    • CalPERS holds all of the power once you sign the Resolution Contract.
    • If you decide to go to CalPERS make sure you have a specialized law firm that understands government contract details, health contracts, health negotiations, and powers of negotiation.
    • Communication with CalPERS is non-existent for all intents and purposes once the Resolution is signed.
    • There is no dedicated person to assist with troubleshooting, answering questions, or seeking information.
    • Often receive confusing and different answers.
    • SISC comes with a dedicated team with your plan so you have easy access to information and problem solving. Employees have not complained about SISC as compared to complaints on the difficulties in service and pharmacy issues with CalPERS and OptumRx.

CAL POLY, SAN LUIS OBISPO

• • • Are looking to leave CalPERS for another health care coverage.
    • CalPERS is not flexible and you cannot negotiate or have any control over benefits or cost adjustments.

SAN ANTONIO COLLEGE DISTRICT

• • • Classified staff left CalPERS 12/31/19.  College had been with CalPERS since founding in 1946.
    • Rising costs – no control over costs.
    • Once on CalPERS, the District has no relationship with retirees.  They are on their own and District cannot intercede to help.
    • Many States do not have CalPERS networks.  So out-of-network costs are high with no limits.
    • Always CalPERS way or the highway.  Very tiring.  No say, no power, no influence over anything.
    • CalPERS owns all information and will not share.  Cannot keep track of retirees.
    • CalPERS PPO not available in many other States (Oregon/Washington OK).  Must submit receipts for reimbursement.
    • Staff consistently involved with reimbursement issues in the retiree Medicare coverage in the Supplemental Plan.
    • Once retiree is transferred to CalPERS coverage in the Supplemental Plan, they are disconnected from College assistance.
    • Can offer no assistance.  Hard on older retirees.
    • Unhappy with retiree treatment.
    • Had care level – use cafeteria choice with fixed District contribution (10K).
    • No Union role but salary.
    • Moved to SISC.
    • Premium increases (composite) 10%, 10%, 23%, 3%, 13%.  Couldn’tpredict from year to year.
    • District works through CalPERS, not Anthem.

EMPLOYERS LEAVING CALPERS:

2016  (13)  Ohlone Community College District – too expensive

2017  (9)    Gavilan Joint Community College District – too expensive

2018  (9)

2019  (?)    Mt. San Antonio College – too expensive, too many                        aggravations, dissatisfaction

PRIMARY REASONS CITED FOR LEAVING CalPERS per Burnham

NOTE:  This information for leaving CalPERS was presented to the ASCC/District Benefits Committee by Burnham (9-5-19) at the request of the Committee and reasons given here are CalPERS’ brief statement of reasons.  Interviews with employers as listed in the beginning of this document provides a much more detailed list of complaints.

• • • Lack of flexibility/ difficult to work with  (8)
    • PPO Plans turning into HMO-like plans (1)
    • Rates too high/ too expensive  (26)
    • Other post employer benefits (OPEB) liability concerns (5)