SMC — Hundreds of classified employees here — including gardeners, administrative assistants and technical support staff — have agreed to a new health care plan that is expected to save the community college more than $1 million next year, officials said Monday.
By reducing health care costs by an estimated $1,097,365, Santa Monica College was able to add 200 classes in the past few weeks, restoring sections that were eliminated because of budget constraints, said SMC President Chui L. Tsang.
Those classified employees who switched to the more affordable PERS Choice plan will continue to have access to the same network of health care providers and be covered for the same medical conditions as the more expensive PERS Care plan, said Marcia Wade, vice president of human resources.
SMC will also continue to pay employees’ health premiums.
That said, employees who made the switch will pay slightly higher out-of-pocket payments for certain services. In exchange, SMC has set up a health reimbursement account for each classified employee to cover some of those additional costs. SMC has committed to pumping $100,000 into those accounts every year until 2016.
Employees will receive anywhere from $1,000 to $4,000 depending on the plan they were previously enrolled in and the number of family members covered.
Those who stuck with the “Cadillac” plan, or PERS Care, will have to pay the difference between that plan and PERS Choice, which could be significant, Wade said.
In June, CalPERS, the college’s health care provider, announced that premiums for PERS Care will increase 15.14 percent in 2012, one of the largest increases ever. Wade said employees are being encouraged to switch and the overwhelming majority have done so.
There are 451 classified employees enrolled in a health care plan offered by the college. Of that, about 139 have the more expensive PERS Care option, Wade said.
The change in health care plans is needed to cut costs, Wade said. This year the college’s benefit liability rose to 20.7 percent of the general fund, taking money away from core programs.
The college’s managers and trustees switched over to the new health care plan in 2011, reducing premiums by an estimated $790,000 for the two years combined.
Negotiations are ongoing between the college and faculty to secure a similar agreement on benefits to take effect in 2013.
Statewide, enrollments in the more expensive PERS Care health plan have been in a decade-long decline, dropping from 14,682 active enrollments in 2002 to only 6,229 in 2010, Wade said. The Los Angeles Community College District, with 3,458 full-time employees, switched over to the less expensive program in 2009.
“Medical costs are escalating, and for the district to provide full coverage, I think that’s a good deal,” Wade said.
SMC has not had to layoff employees or resort to furloughs, despite funding cuts from the state, Wade said.