March 21, 2018

Communications & Stakeholder Relations
Contact: Bill Madison, Information Officer
(916) 795-3991 - newsroom@calpers.ca.gov

New PERS Select plan designed to increase engagement and improve health

SACRAMENTO, Calif. - The California Public Employees' Retirement System Board of Administration today took another step forward to bring innovative health benefits to its members. The board approved a value-based insurance design (VBID) plan for PERS Select.

VBID is designed to improve coordination of care through engagement with a personal doctor and uses incentives to improve member health and wellness.

"This is a major change and innovative way of delivering value-based insurance," said Priya Mathur, the president of the CalPERS Board. "Members still have a choice of plans, and this new PERS Select option encourages enrollees to be more engaged in their own health care, and enables them to make better informed health care decisions."

The new VBID design takes effect as a two-year pilot in the 2019 plan year for the PERS Select Preferred Provider Organization non-Medicare plan.

The board's decision revises the PERS Select PPO non-Medicare plan to a VBID approach that allows a member to choose a personal care physician to coordinate their health care, and ensures they are getting the proper care when needed. The new Select plan will also provide incentives for members to become more involved in their health decisions and earn credits to reduce their annual deductible costs.

Currently, over 50,000 CalPERS members are enrolled in the PERS Select non-Medicare plan. CalPERS estimates that those enrolled in the PERS Select plan will save between $221 and $277 annually on their premiums, for an overall savings of more than $3 million a year. The system estimates a total cost savings of nearly $10 million.

The new plan also allows members in rural areas with no Health Maintenance Organization (HMO) options to have HMO-type support. Currently, 18 counties in California are without an HMO in their area.

"A number of our members live in rural areas where an HMO-like option of having a personal physician will be appreciated," said Rob Feckner, chair of the CalPERS Pension and Health Benefits Committee. "They, too, will have access to a doctor who supports their care and guides them through the health care system, and an opportunity to participate in wellness activities to improve their overall health."

Members in PERS Select can also easily reduce their annual deductible costs by participating in up to five evidence-based health and wellness activities:

  • Get an annual biometric screening
  • Receive an annual flu shot
  • Certify that they are non-smokers, or participating in a smoking cessation program
  • Get a second opinion for non-emergency elective surgeries
  • Engage with a nurse manager for disease management (for those who can be treated by disease management programs)

Members who participate in the incentives program can save between $500 and $1,000 per year on annual deductibles of $1,000 to $2,000 per year. 

CalPERS will evaluate the PERS Select plan changes quarterly during the two-year period, and report the findings to the Board with recommendations to continue the plan as it is or modify the benefits.

About CalPERS

For more than eight decades, CalPERS has built retirement and health security for state, school, and public agency members who invest their lifework in public service. Our pension fund serves more than 1.8 million members in the CalPERS retirement system and administers benefits for more than 1.4 million members and their families in our health program, making us the largest defined-benefit public pension in the U.S. CalPERS' total fund market value currently stands at approximately $352 billion. For more information, visit www.calpers.ca.gov.