San Jose Members Overwhelmingly Ratify Retiree Healthcare Agreement

Our three San Jose bargaining units voted overwhelmingly to accept the recently negotiated agreement over retiree healthcare.

The agreement was a compromise on both sides and creates an opportunity to work together moving forward on solving a major issue for our members, as well as the City.

Components of the agreement include:

  • Delaying until January 2015 the full ramp-up of the Annual Required Contribution to retiree healthcare, which was set to increase 3.2% on June 23, 2013.
  • Creating a Retiree Healthcare Working Group in which the Labor Coalition and the City will split the cost to bring in an industry expert on how to reform retiree healthcare.
  • The City agreeing to cover any adverse tax consequences Members may experience due to a technical change in the financial mechanisms used to hold retiree health contributions.
  • Modernizing healthcare options for City workers. The structure will move from the old model of employee only and employee plus family, to the industry norm of employee only, employee plus a child, employee plus an adult, and employee plus family.
  • Creating a new benefit for new hires – employees hired after the execution of this agreement will not receive this retiree healthcare benefit. However, we pushed and the City agreed to cover the unfunded liability costs that these employees would have paid had they been in the plan. This is extremely important as it sustains the benefit moving forward and gives us time to work on reforming the benefit for the long term.

With the agreement in place, we move into the first phase of the 18-month agreement and will begin working with the Coalition and the City on choosing an expert to help guide us through the complex world of health and retiree healthcare options.