SUBSIDY AND BENCHMARK
The County subsidizes retiree medical and dental/vision insurance premiums based on your years of service credit (excluding ARC). If you have 10 years of service credit, you are eligible for a retiree healthcare subusidy.1
Here’s how the premium subsidy works: If you have 10 years of service credit (not including ARC), the County contributes 40 percent toward the monthly premium of your selected healthcare plan or 40 percent of the benchmark plan premium, whichever is less.2 For each additional year of service credit, the County contributes four percent — up to a maximum of 100 percent for a member with 25 years of service credit. Members are required to pay the difference each month on premiums exceeding the benchmark amount.
*The County’s subsidy is up to the benchmark rates only. If the selected group plan’s
Although retirees with fewer than 10 years of service credit are not eligible for the County subsidy, they are eligible to participate in LACERA-administered Retiree Healthcare group plans. In such cases, these retirees are responsible for the full amount of the insurance premiums.
The "Benchmark" Plan
When we talk about Retiree Healthcare and the County’s premium subsidy, we use the term "benchmark." But what does "benchmark" mean?
When we use the word "benchmark" in association with the healthcare premium subsidy, we are referring to the cost of a particular healthcare plan. This plan is the measure — the benchmark — for which the premium subsidy is applied. Example: If you have 10 years of service credit, the County contributes 40 percent toward the monthly premium of your selected plan or 40 percent of the benchmark plan premium, whichever is less.
The LACERA-administered Retiree Healthcare group plan contracts are negotiated annually, and the premiums may vary accordingly. The current benchmark plans for medical are Anthem Blue Cross I and II for Tier 1 members, and Anthem Blue Cross III (enrolled in Medicare) and Anthem Blue Cross I and II for Tier 2. The current benchmark for dental/vision is Cigna Dental/Vision Indemnity for Tier 1 and Tier 2.
|Health Plan||Current Cost/
(Based on Retiree Only Rate)
|Tier 1||Anthem Blue Cross I & II||$1,062.79*|
|Tier 2||Anthem Blue Cross I & II||$1,062.79*|
|Anthem Blue Cross III (enrolled in Medicare)||$428.70*|
|Tier 1 and Tier 2||Cigna Dental/Vision Indemnity||$46.61*|
*Effective July 1, 2015
Now that you have an understanding of the benchmark, let’s talk about what happens when you have 25 years of service credit: You are eligible to receive 100 percent of the benchmark plan premium. You may have heard if you work for 25 years that your retiree healthcare is free, but that is not accurate. The County’s subsidy is up to the benchmark rates only. If the selected group plan’s premium exceeds the benchmark rates, the member is responsible for paying the difference.
Which Retiree Healthcare Tier Are You In?
County employees hired before June 30, 2014 are enrolled in the LACERA-administered Retiree Healthcare Benefits Program — Tier 1 (Tier 1). The Tier 1 County Retiree Healthcare premium subsidy includes the retiree and a spouse or registered domestic partner and eligible dependents (family premium).
County employees hired after June 30, 2014 are enrolled in the Los Angeles County Retiree Healthcare Benefits Program — Tier 2 (Tier 2). The Tier 2 County Retiree Healthcare premium subsidy includes only the retiree.3
1 In order to retire, you must meet the eligibility requirements for your plan.
2 Service credit from the city of Los Angeles (LACERS) may count toward the County’s retiree healthcare subsidy; certain eligibility rules apply.
3 Other rules apply. See RHC: Tier 2 web page.