BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  AB 1814|
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                                    CONSENT


          Bill No:  AB 1814
          Author:   Buchanan (D)
          Amended:  4/13/10 in Assembly
          Vote:     21

           
           SENATE JUDICIARY COMMITTEE  :  5-0, 6/10/10
          AYES:  Corbett, Harman, Hancock, Leno, Walters

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  74-0, 4/29/10 - See last page for vote


           SUBJECT  :    Discrimination in employment

           SOURCE  :     California Teachers Association


           DIGEST  :    This bill provides that the age discrimination  
          prohibitions of the Fair Employment and Housing Act do not  
          prohibit an employer from providing health benefits or  
          health care reimbursement plans to retired persons that are  
          altered, reduced, or eliminated when the person becomes  
          eligible for Medicare health benefits.

           ANALYSIS  :    Existing state law, the Fair Employment and  
          Housing Act, generally prohibits discrimination in  
          employment on the basis of age with respect to persons aged  
          40 years and older.  (Gov. Code Sec. 12940.)

          Existing federal law, the Age Discrimination in Employment  
          Act, likewise generally prohibits discrimination in  
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          employment on the basis of age with respect to persons aged  
          40 years and older.  (29 U.S.C. Sec. 621 et seq.)

          Existing federal law contains an exemption from the  
          prohibition against age discrimination for the provision of  
          health benefits for retired participants that are altered,  
          reduced, or eliminated when the participant is eligible for  
          Medicare health benefits whether or not the participant  
          actually enrolls in the other benefit program.  (29 C.F.R.  
          Sec. 1625.32.)

          This bill provides that the prohibition on age  
          discrimination provided for in the Fair Employment and  
          Housing Act does not prohibit an employer from providing  
          health benefits or health care reimbursement plans to  
          retired persons that are altered, reduced, or eliminated  
          when the person becomes eligible for Medicare health  
          benefits.


           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  6/29/10)

          California Teachers Association (source)


           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          this bill responds to litigation brought by a retiree  
          against a school district in Contra Costa County.  The  
          plaintiff in that case was apparently denied a contractual  
          benefit because she retired after she was eligible for  
          Medicare and the benefit was intended to be a bridge to  
          Medicare.  She initiated a law suit against both the school  
          district employer and the employee organization claiming  
          age discrimination under the FEHA.  The District  
          subsequently filed a cross complaint for declaratory relief  
          against the employee organization and 24 retirees,  
          threatening to recoup benefits already paid to those  
          retirees and to cease paying future benefits if the  
          collective bargaining agreement that provided the retiree  
          health benefits was found to be illegal. 


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          The author's office argues that if this type of litigation  
          proliferates under the FEHA, California employers will be  
          discouraged from offering these modest retiree health  
          benefits, which currently enable employees to be covered by  
          medical insurance if they choose to retire before they are  
          Medicare eligible.

          In support of this bill, the California Teachers  
          Association writes, "The importance of having access to  
          health care is paramount for a teacher moving into  
          retirement, particularly as more and more school districts  
          are no longer offering retiree health benefits (over 70  
          percent offer no retiree health benefits).  AB 1814 simply  
          codifies what is already permissible at the federal level  
          to ensure local entities clearly understand that a "bridge"  
          to retiree health benefits is permissible."


           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Beall, Bill  
            Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,  
            Bradford, Brownley, Buchanan, Charles Calderon, Carter,  
            Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,  
            DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,  
            Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,  
            Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,  
            Huber, Huffman, Jeffries, Knight, Lieu, Logue, Ma,  
            Mendoza, Miller, Monning, Nava, Nestande, Niello,  
            Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin,  
            Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra  
            Strickland, Swanson, Torlakson, Torres, Tran, Villines,  
            Yamada, John A. Perez
          NO VOTE RECORDED:  Bass, Caballero, Jones, Bonnie  
            Lowenthal, Torrico, Vacancy


          RJG:do  6/29/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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