About 102,000 California state workers are eligible for a unique new health insurance benefit worth about $3,100 per year. While most of those eligible will receive the money automatically, about 20,000 won’t.
First negotiated by the state’s largest public employee union, SEIU Local 1000, the benefit comes in the form of a $260 monthly stipend. The stipend is loosely based on the amount workers represented by the union pay toward their health insurance each month.
Eligible employees who already have CalPERS health insurance will receive the money automatically. Those who don’t — about 20,000 people, according to CalPERS and CalHR figures — might need to do some math to figure out if it’s worth enrolling in one of the plans to receive the stipend.
Below, we answer some common questions about the new benefit.
Anyone represented by SEIU Local 1000 or by California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment is eligible for the $260 per month stipend. Workers do not need to be union members to be eligible.
What are the requirements?
To receive the stipend, workers have to be enrolled in one of the health plans offered through CalPERS. For 2020, there are 19 options. The stipend is available for any of the plans — not just those with PERS in their plan names.
To receive the benefit, an employee has to be the primary policyholder on a plan. Dependents on a plan, even if they are state workers, aren’t eligible for the stipend. For example, if two state workers were married, each would have to be enrolled in their own CalPERS plan for both to receive the stipend.
When will the money be paid?
The stipend kicks in July 1, 2020 for Local 1000 workers who already have a health plan through CalPERS. Most Local 1000 workers who don’t have a CalPERS plan will have to wait until January 2021 to start receiving the stipend, as explained below.
For workers represented by CASE, the stipend will be paid retroactively to July 1 of this year. The payments are expected to show up in paychecks in December or January, according to CalHR.
How will it be paid?
The stipend will appear on paychecks as if it were income, and is taxed as income. The stipend amount will not change from year to year. Local 1000 workers will receive it through June 30, 2023. The CASE workers’ agreement runs through July 1, 2020.
Is it pensionable?
Does it make sense to switch to a CalPERS plan to get the $260 per month?
Employees who don’t get health insurance through CalPERS have a number of factors to consider.
For the most part, employees may only sign up for a CalPERS plan during annual open enrollment periods. Since this year’s open enrollment period has passed, most employees who want to enroll in a CalPERS plan will have to sign up during open enrollment in fall 2020 for a plan whose term would begin Jan. 1, 2021, when the employee could start receiving the stipend.
Employees also may sign up or switch plans after certain life events that trigger special enrollment periods. Qualified events, detailed on page 33 of CalPERS’ health benefits guide, include marriage, birth and loss of coverage from another source.
California pays roughly 80 percent of health insurance premiums for most of its workers, with some exceptions. But the state’s contribution is not precisely 80 percent for every employee -- it’s a dollar amount equal to an average of 80 percent of the four most popular plans the state offers.
For 2020, the state will contribute about $609 per month for most individual employees, according to CalHR. For an employee plus a dependent, the state’s contribution is $1,223.
Health insurance premiums for CalPERS’ 2020 plans range from $404 per month to about $1,116 per month per person. For an employee plus a dependent, those amounts are doubled.
For 2020, the state’s contribution completely covers premiums for three plans. The state’s contribution plus the stipend would completely cover 15 plans.
State workers who don’t get their insurance through CalPERS receive a compensatory cash payment of $140 or $155 per month, depending on their employer.