L.A. County Supes Adjust Healthcare Benies for Union Workers

Los Angeles County could save up to $840 million on retiree healthcare over the next 30 years, based on a deal reached with labor groups, a county supervisor announced Tuesday.

Supervisor Don Knabe said the county currently pays about $488 million every year to cover healthcare costs for retired employees. Reforms -- to which the last in a series of county unions agreed last week -- represent the most significant reductions to retirement obligations in more than 35 years, Knabe said.

“We had a responsibility to mitigate spiraling retiree healthcare obligations for future employees, while still providing a level of retiree healthcare that is both sustainable and fiscally responsible,” Knabe said.

Currently, the county covers 40 percent of healthcare costs for any employee with 10 years of service, with that percentage ramping up at the rate of 4 percent a year, until costs are 100 percent covered after 25 years of service. Upon a retiree's death, benefits are extended to spouses, domestic partners and children.

“The county was on the hook paying for healthcare for people who had never even worked for the organization,” Knabe said.

The new labor agreement provides medical coverage for retirees only and Medicare-eligible retirees will be required to enroll in Medicare. The same vesting and years of service formulas will apply. The reforms will affect only new employees hired on or after July 1.

“Over the last several years, our labor partners were essential to helping the county weather the recession by sacrificing raises and cost of living increases. I'm grateful that labor has stepped up once again,” Knabe said.

In exchange, the county agreed to cover increasing healthcare premiums for existing employees.

The LACERA Board of Retirements still needs to approve the reform proposals.

--City News Service