Valued colleagues:

As Open Enrollment begins, I have heard from many members of our community about how they will be impacted by increased medical premiums for UC plans next year. Nothing I can say will help you balance your monthly budget, but I feel I owe you an explanation of the steps we’ve taken to maintain quality, choice, affordability and equity.

As someone who takes UC’s commitment to high-quality and affordable health benefits very seriously, the premium increases for 2024 are painful. Even with UC covering over 80% of the cost, next year’s medical premiums will make a bigger dent in paychecks that need to cover many other critical expenses.

Since we learned that medical costs were increasing for 2024 — nationally, as well as for UC — I have been working with UCOP leadership and Systemwide Human Resources colleagues to figure out how to ease the burden of rising costs on our employees and retirees.

Sacrificing quality or choice was never on the table. UC continues to offer CORE, a high-deductible medical plan, as a $0 premium option for budget-conscious employees who don’t anticipate significant medical needs. For other employees, though, it is critical that UC continue to offer plans with a range of features, including low out-of-pocket costs for care and access to UC Health’s world-class providers (access that is protected regardless of issues that may arise between UC Health providers and insurance carriers).

After many conversations and budget analyses, UCOP leaders committed to $93 million in subsidies — added to UC’s original budget — directed toward lowering premiums. This follows a subsidy of $29.5 million last year, also added to lower premiums for employees and retirees, and several years of premium increases kept in check through well-managed costs and contracts.

As part of UC’s commitment to equity, medical plan premium costs continue to be adjusted by salary range and premium increases are distributed equally by percentage across pay bands. For example, the premium for self-coverage in Kaiser increased by 26%; that’s an increase of less than $8/month for employees who earn up to $68,000 a year and an increase of $38.58/month for employees who make over $204,000 a year.

The challenge of responding to the complicated factors that affect the cost of health care benefits has not gotten any easier during my four years leading Systemwide Human Resources. We will continue to work closely with our health plan partners to manage costs, to adjust UC’s budget to maintain our commitment to quality and affordability, and to listen to and learn from our community.

If you have any questions or feedback, please reach out to Jay Henderson, associate vice president of UC Total Rewards, at healthandwelfarebenefits@ucop.edu.

Sincerely,
Cheryl Lloyd
Vice President, Systemwide Human Resources

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