CalPERS committee approves VBID updates for 2026, votes against adding PERS Gold for out‑of‑state members

The CalPERS Pension and Health Benefits Committee on March 2025 approved changes to the value‑based insurance design (VBID) for the PERS Gold basic PPO for plan year 2026 and separately declined to expand the PERS Gold service area to all 50 states.

The VBID changes, approved first by the committee, revise the program’s deductible offset credits and expand the activities members can complete to earn up to five $100 credits to offset the $500 inpatient deductible. The credits will be available across three activity categories — engagement and self‑care, mental health monitoring and preventive care — and will require active participation with Included Health care coordinators or completion of specified preventive services to earn some credits, CalPERS staff said.

Why it matters: Staff said the VBID refinements aim to improve care quality and equity across CalPERS PPO members while maintaining premium neutrality. Julia Logan, a CalPERS team member, said the changes “maintain the overall structure of the VBID program beginning with a $10 office co payment for primary care” while expanding opportunities to earn credits, and adding a mental‑health screening component for 2026.

What the committee approved: The motion to approve staff’s VBID recommendation was moved and seconded by trustees and passed by voice vote; the meeting transcript records the motion was approved by majority voice vote but does not list an exact roll‑call tally.

Out‑of‑state PERS Gold: Staff also presented three modeled options for out‑of‑state basic PPO members, roughly 26,000 members (about 11% of the Basic PPO population). Option 1 would expand PERS Gold’s service area nationwide while keeping the existing 80/20 benefit design, but staff modeled it would raise PPO premiums by about 2%–3% for in‑state and out‑of‑state members. Option 2 would create a new lower‑premium out‑of‑state Gold with steeper benefit changes — in‑network coinsurance rising from 20% to 35%, the individual deductible increasing from $1,000 to $5,500, maximum out‑of‑pocket moving from $3,000 to about $8,300 and out‑of‑network cost‑sharing rising to 50% — producing roughly 30% lower premiums for out‑of‑state members but much higher member out‑of‑pocket exposure. Staff recommended Option 3: retain the current service area and plan design.

Trustee discussion and public comment: Dozens of out‑of‑state employees and affected family members called or spoke in person during public comment, saying the lack of a lower‑cost in‑state equivalent (pre‑2022 PERS Choice) had produced steep premium burdens. Several public commenters described monthly family premiums exceeding $1,000 and urged the board to adopt Option 1. Trustee Lorena Ortega and others pressed staff for a roadmap and possible bargaining or legislative approaches to address the subgroup of a few hundred active state employees required to live out of state; staff said collective bargaining and discussions with CalHR or statute changes could be pursued but that creating a plan solely for a small subgroup is prohibited by the enabling statute (PEMHCA) and would be legally complicated.

Final vote on out‑of‑state expansion: After extended discussion and public comment the committee moved to adopt staff’s recommendation (Option 3 — no expansion). The vote was taken by roll call: Kevin Pockey (aye), Malia Cohen (no), David Miller (aye), Lorena Ortega (aye), Jose Luis Pacheco (aye), Theresa Taylor (no), Yvonne Walker (aye), Melissa Willette (abstain). The motion passed (outcome: approved to retain status quo); the transcript records the roll‑call votes above.

What the decision means: Staff said that adding a nationwide Gold option without offsetting changes would likely shift membership and raise in‑state premiums, destabilizing the PPO pool. Trustees and staff also noted other paths remain — bargaining‑negotiated subsidies for specific employee groups or legislative changes — and the committee requested staff return with additional research and creative options at the June public meeting.

Votes at a glance: - Motion: Approve staff recommendation to modify VBID credits for 2026. Mover: Trustee Jose Luis Pacheco; second: Theresa Taylor. Outcome: approved (majority voice vote; exact tally not specified in transcript). Notes: Implementation steps to follow if approved. - Motion: Adopt staff recommendation not to expand PERS Gold service area (Option 3). Mover: President Theresa Taylor; second: (recorded as second). Outcome: approved by roll call (yes: Kevin Pockey, David Miller, Lorena Ortega, Jose Luis Pacheco, Yvonne Walker; no: Malia Cohen, Theresa Taylor; abstain: Melissa Willette). Notes: Committee directed staff to explore legislative/bargaining options and report back in June.

Ending: Committee chair Ramon Rubalcaba thanked callers and directed staff to continue exploring out‑of‑state remedies, including statute and subsidy pathways, while maintaining the system’s fiscal stability.