UC Retirement Plan

Retiree Health Benefits: Frequently Asked Questions

Check out the retiree health benefits calculator

Q. What are UC’s retiree health benefits and why should I care about them?
  A. When you retire, you may be eligible to keep your UC benefits, such as medical, dental, vision, legal and AD&D insurance. Depending on the age at which you retire and how many years of UC service you have, the university currently pays anywhere from 5% to 100% of these benefits for the rest of your life. Also, when you become eligible for Medicare, if UC’s contribution to your plan is greater than the premium, UC reimburses you each month for a portion of your mandatory Medicare premium. That reimbursement can range from a few dollars to over $300, essentially raising your income in retirement.  As you can see, all of this amounts to a very valuable benefit!
Q. As a UC employee, I already pay for parking, pension and health care, why should I pay more?
  A. The university promises us retiree health benefits, but sets aside no money for them. That is why they can unilaterally cut or even end them. Because there are no employee contributions, there are no guarantees and UC can slash benefits whenever it wants, and has done so regularly in the past two decades. If employees plan ahead with a modest contribution to a retiree health benefits fund (more on that below), we will be “co-owners” of the UC retiree health system and be able to afford health care that is, at least in part, guaranteed when we retire. The current suggested contribution would amount to $10 per month for an employee making $4000 per month.
Q. What will my retiree health benefits cost?
  A. The cost ranges from $0 per month for the most basic “core” plans for single people, to thousands per month for more robust medical plans covering more family members (see UC’s chart of retiree medical plan, for example). Each year, UC has increased the employee cost. Figuring out exactly what your retiree health benefits will cost can be very challenging because there are many different factors that affect the cost, including the plan chosen, when you were hired and how many years of service you have. Here are some of the main ones and the impact they may have on you:
    How many years did you work at UC? If you have 14 years of service credit, UC plans to pay 70% of the premium. Premiums vary by plan and range from $700 to $1500 and they increase each year. If you have 10 years of service UC will only pay 35% of the premium. There is a sliding scale from 10 years up to 20 years.
    When were you hired? If you were hired after 12/20/2013 you only get the 70% employer contribution if you retire at age 65. You get nothing until you are 55 and there is sliding scale from 55 to 65. If you were hired before 12/20/2013, you need only be over 50 to get the employer contributions with a sliding scale dependent on your years of service.
    Are you or your dependents over 65 and Medicare eligible? Your premiums will drop from hundreds of dollars to tens of dollars.
    Do you take regular medication? The co-pays are currently $20 for most medications on most plans (but not all). Some make you pay a percentage of the cost up $1500 per year.
    How many doctors’ visits do you make per year? Like medications, co-pays are usually but not always $20 and they may increase.
Q. What does bargaining for a retiree health benefit trust fund mean?
  A. Right now, UC has no fund to pay retiree health benefits and covers the cost out of its current operating income. This is a lot like not having a pension fund and expecting to pay for it after you retire. Not surprisingly, this lack of pre-funding means that management has been trying to cut or eliminate these benefits for nearly every UC retiree under 65. However, if UC retiree health benefits are pre-funded through contributions, and the savings are institutionally invested, the returns may outpace the contributions and provide a significant resource to offset health care costs for UC retirees.
Q. Why should I care if I will probably not stay long at UC?
  A. UPTE-CWA has set a goal to bargain retiree health benefits for everyone. Even if you leave the university, you could get UC’s retiree benefits later or receive your contributions back with interest. Also, if we cannot preserve quality retiree health benefits at the University of California – the state’s second largest employee — it is unlikely that you will get them at any other job in California in the future.
Q. Do I have to take my retiree health benefits when I leave the university?
  A. Yes, it is to your advantage to do so.  You must claim the benefits within 120 days of your retirement separation date from the university. If, at the time of your retirement, you have health benefits through another source (a new employer, a partner/spouse, etc.,), you are allowed to defer UC’s retiree health benefits by filling out a form with Human Resources. If you take your UC retirement as a lump sum cash out, you lose your retiree health benefits entirely.
Q. Does the Affordable Care Act (ACA), also known as Obamacare, impact our health care?
  A. Not directly. The ACA has provided millions of uninsured with health insurance. That means the public will not be paying as much for emergency care of the uninsured. In addition, the University of California, as a medical provider itself at its 5 teaching hospitals, will not be engaging in as much uncompensated care. So overall, the ACA will probably bring down costs, but there is no direct impact on coverage for UC employees.
Do you have additional questions that you would like answered? Please email them to UPTE’s President and we will post the answers here.