CalPERS Update: Earnings and Health Benefit Plans

CalPERS has reported a preliminary 8.6 percent net investment return for the 12-month period that ended June 30, 2018. This is the second year in a row that earnings have exceeded the long-term assumed rate of return, which is 7.25% for the current fiscal year. With assets of more than $351 billion, CalPERS overall funded status rose three percentage points to an estimated 71 percent.

CalPERS has also concluded negotiations with health plan providers for 2019. Overall rates will increase 1.16 percent with members in Basic Health Maintenance Organization (HMO) plans seeing an average increase of 0.37 percent and members in Preferred Provider Organization (PPO) plans will see an overall average increase of 2.83 percent. While these are averages, some plans have significant increases (22.96% for Anthem HMO Traditional and 19.80% for PERSCare PPO) and some plans have significant decreases (-25.56% for PERSSelect PPO). Over the objections of ACSS and other state employee advocates, HealthNet will be leaving the Sacramento market in 2019 and Blue Shield Access+ will exit from eight Bay Area counties in 2019.

Because of the wide variances in rates and changes in plan availability, it will be particularly important to evaluate your options during this year's Open Enrollment period from September 10 to October 5.  CalHR will soon release the "CoBen Allowance" for 2019 which is the state employer contribution for health, dental and vision for the 2019 calendar year. Prior to Open Enrollment, CalHR will update the "Benefits Calculator" on the CalHR webpage which allows comparisons of out-of-pocket costs depending on health benefit selections. ACSS will provide the CoBen Allowance amount for 2019 and a link to the Benefits Calculator when it is available.