MOU with two unions will affect employees hired after May 1
The West Kern Community College District Board of Trustees approved a memorandum of understanding with the two employee unions that is designed to help rein in health care costs.
Both groups endorsed an agreement amending contract language regarding health benefits for retirees.
For current retirees health benefits continue for life.
That meant the district would pay for full benefits even though, at age 65, Medicare becomes the primary insurer and the district plan is secondary.
“We are paying full benefits as though it was the primary,” Superientendent Willy Duncan said.
Under the revised contract those benefits continue until the retiree turns 65, at which time the employee will shift over to a supplemental health care program. A program has not yet been selected.
The new contract language affects anyone hired after May 1 of this year.
Duncan said the revised plan saves the district money.
At present, the district’s health benefit obligation for current and future retirees is $30 million.
“With this, we hope to get that under $20 million,” Duncan said.
The college has set up a trust designed to chip away at the retiree obligation.