Why do we have to do anything about our health care? I’m perfectly happy with the current plans.
For the last 15 years, by working closely with the district, we have managed to keep our PPO which pays 100% in network. The JLMBC has done this by initiating administrative efficiencies, and by making small plan modifications. But now, with the cost of health care rising astronomically, we are at a point where we need to consider ways to control the cost of the PPO plan.

What caused this current health care crisis in LACCD?
Over time the demographics of our membership have changed. Our membership is 43% retired. Our aging membership uses a lot of medical service, and we do not have sufficient numbers of young people to positively impact the risk pool. All together, we have a PPO plan whose viability is threatened.

Is there a solution?
We believe the CalPERS health plan offers a solution for several of our most pressing problems. CalPERS has a much bigger and younger pool of participants so they can offer high quality care at a competitive price. They have a terrific record of administering their plans – at a low cost. As with our current plans, there are no exclusions for pre-existing conditions. They have a high quality customer service program. And they have many online tools (accessible from your home computer) to help with enrollment, program administration and health plan decisions.

Do we have to make the change at this time? What happens if we don’t?
We can realize $15 million in savings in premiums if we make the change effective 2010. That $15 million can be applied toward enhancements to salary schedules, funding for the Health Reimbursement Arrangements (HRAs), or for other purposes.

What’s an HRA and how will it help us?
HRAs are plans designed to reimburse employees for qualified out-of-pocket health care expenses with non-taxable dollars. They are funded solely by employer contributions. They take the sting out of increased exposure that members will be liable for on their deductibles and co-insurance. Best of all, district contributions to the HRAs roll over from year to year, and can be accessed even in retirement.

How will retirees be impacted?
Retire benefits for those over age 65 do not change by moving to CalPERS. Medicare is the primary payer of their claims, and the CalPERS Medicare supplement picks up the co-pays, deductibles and other charges that Medicare does not cover. Retirees would continue to pay their own Medicare Part B premiums (which could be paid with HRA money). Retirees under age 65 are treated as actives in the CalPERS plans.

How will actives be impacted?
The answer depends on your plan. For active members and their families in Kaiser or the Blue Shield HMO, office visit co-pays would be $15, and there would still be no deductible or co-insurance. The CalPERS Kaiser plan provides chiropractic and acupuncture coverage, which is not available in our current Kaiser plan. The PERSChoice PPO (Blue Cross network) has a $500 deductible for an individual capped at $1,000 for a family. New to us at LACCD would be co-insurance. Our current plan pays 100% in network while PersChoice pays 80% of network charges after the annual deductible has been met. Co-insurance exposure is capped at $3,000 annually for an individual, $6,000 for a family. Members can draw from their HRA to cover these out of pocket costs. Statistics show 2% of members reach their out-of-pocket maximum in any given year.