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Open Enrollment for 2025 benefits: Frequently asked questions

Open Enrollment for 2025 benefits begins on Thursday, October 31, 2024. These frequently asked questions are intended to supplement the information shared in Systemwide Human Resources Vice President Cheryl Lloyd’s letter to the UC community about medical plan changes for 2025.

For more information about Open Enrollment, keep an eye on UCnet and UCnetwork, take advantage of your location’s Open Enrollment resources and check your mailbox and email inbox for details and reminders.

Why are employee medical plan premiums continuing to increase?

Premiums for 2025 are increasing because UC’s costs for medical and prescription drug claims are increasing. These increases are due to a combination of increased health care utilization as our population ages and rates of chronic health conditions rise, enhanced benefits, and the rapidly expanding use of costly new drugs and treatments.

Determining the amount that employees contribute to medical plan premiums is a challenging process that weighs budgetary constraints and the critical importance of equity and affordability. UC takes its responsibility to ensure employees access to strong, sustainable benefit plans very seriously, and is working with experts to determine strategies to control cost increases.

How much are total medical plan premium costs for UC employees and retirees increasing for 2025, and how much is UC’s contribution increasing?

The total cost of UC medical plan premiums is increasing by $282 million — from $3.43 billion in 2024 to 3.71 billion in 2025. UC’s contribution is increasing from $2.79 billion in 2024 to 2.99 billion in 2025 — an additional $198 million investment to reduce the impact of rising costs on employees and retirees.

However, because of the size of the overall premium increases, UC employees and retirees will see increases in their premium contributions and in some out-of-pocket costs for care.

Are premiums going up for all UC employee medical plans?

Yes. To ensure that the costs of medical coverage are shared fairly, the CORE PPO plan will require an employee premium contribution beginning in 2025. For UC’s other medical plans, employees with annual salaries up to $140,000 a year in 2024 will see 9% increases in their medical plan premiums and employees with annual salaries over $140,000 a year in 2024 will see 11% increases. To maintain as much stability as possible within these salary ranges, percentage increases in employee contributions will be the same for each salary band across UC’s medical plans (other than CORE) and levels of coverage.  

Contributions for CORE will be the lowest of the UC medical plan options, but this will be a significant adjustment for UC employees who have appreciated the option of a plan that did not require a premium contribution. The Open Enrollment website and ALEX, UC’s virtual benefits counselor, will be available starting October 24 to help CORE members understand their choices and consider carefully whether CORE is still the best option for them.

Why does UC’s contribution to monthly premium costs vary by salary level?

For many years, UC has worked to ensure equitable access to quality health care for all UC employees by requiring lower contributions to monthly premiums from employees with lower annual salaries.  

In 2025, UC will cover an average of:

  • 71% of medical plan premiums for those earning $210,000 or more
  • 91% of medical plan premiums for employees earning the full-time equivalent of $71,000 or less
  • 83% of medical plan premiums for those earning $71,001 to $140,000
  • 76% of medical plan premiums for those earning $140,001 to $210,000

How much does UC contribute to monthly premiums compared to other employers?

On average, UC pays 85% of the cost of medical coverage for a single employee ($21,000 per year in 2025, on average), and over 80% of the cost of coverage for a family. UC contributes 100% of the cost of dental and vision plan premiums for eligible employees and their covered dependents. UC’s contribution is competitive when compared to other employers, who contribute an average (nationally) of 83% of the cost of medical coverage for a single employee and 71% of the cost of coverage for a family. Retirees may also pay a premium for Medicare Part B and D, depending on their income and the plan they choose.

Why can’t UC contribute more to monthly premiums to lower 2025 premium increases for employees?

UC is committed to supporting employees and will increase its contribution to medical plan premium costs from $2.79 billion in 2024 to $2.99 billion in 2025. Despite a challenging budget year for California, this is a 50% higher increase than UC’s projected budget, with the additional spending going directly toward reducing premium costs for employees and retirees.

Because of the magnitude of the overall premium increases, UC’s increased contribution will not fully protect UC members from rising premium costs. Given the significant increases to employee contributions in 2024, UC’s goal for 2025 was to mitigate the impact to employees by keeping contribution increases for those earning up to $140,000 to single digits (9%), and for those earning over $140,000 to 11% (for plans other than CORE).

Why is UC requiring an employee premium contribution for the CORE plan?

UC will begin requiring an employee premium contribution for the CORE plan in 2025 to ensure that employees share the costs of medical coverage fairly. Contributions for CORE will be the lowest of the UC medical plan options. Starting October 24, the Open Enrollment website and ALEX, UC’s virtual benefits counselor, will provide information to help CORE members understand their choices and consider carefully whether CORE is still the best option for them.

Why are copayments and coinsurance for some services changing?

As health care costs and premiums increase, UC must explore all options to minimize those costs, including modifying the features of UC medical plans to moderate increases to employee premiums.

Copayments for outpatient visits have been set at $20 for members of UC Blue & Gold HMO, Kaiser HMO and UC Care (UC Select/Tier 1) for more than 10 years, even as the costs for care paid by UC have increased dramatically. While UC has managed to provide a high level of stability and predictability in those plans, UC leadership opted to increase these and a few other cost-sharing amounts as part of its overall strategy to minimize premium increases for employees.

Copayments for outpatient visits will increase from $20 to $30 for members of UC Blue & Gold HMO, Kaiser HMO and UC Care (UC Select/Tier 1). Copays for prescription drugs will go up for most of UC’s medical plans, and there will be a new tier for specialty drugs that will have 30% coinsurance, up to $150 per prescription, for UC Blue & Gold HMO and Kaiser HMO.

The out-of-pocket maximums for UC’s plans (which set limits on how much you have to pay for covered services in a plan year) are not increasing.