Los Angeles County supervisors finalized reforms to health benefits for future employees Tuesday, in a move that is projected to save the county as much as $840 million over the next 30 years.
Retiree health benefits became a sticking point in contentious labor negotiations last year. Although not technically part of the contract talks, unions objected to the proposal to reduce retiree benefits.
Earlier this year, county and union officials announced a deal that would scale back benefits for employees hired after July 1, but leave current employees’ payments unchanged.
County officials praised the unions for agreeing to the deal. Board Chairman Don Knabe said the change would “reduce spiraling obligations for future employees while still providing a level of retiree healthcare that is both sustainable and fiscally responsible."
Under the new arrangement, the county will still cover 40% to 100% of health insurance costs for retirees, depending on how long they worked for the county, but will no longer cover the cost of health coverage for former employees’ spouses and children. Retirees will have the option to buy coverage for dependents.
Retirees who are eligible for Medicare will be required to enroll in that program, with the county providing supplemental coverage.
The county currently pays $487.8 million a year for retiree healthcare.