BILL NUMBER: AB 1346 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Pan
FEBRUARY 22, 2013
An act to amend Section 22880 of the Government Code,
relating to public employees. 22877 of the Government
Code, relating to the Rural Health Care Equity Program.
LEGISLATIVE COUNSEL'S DIGEST
AB 1346, as amended, Pan. Public Employees' Medical and
Hospital Care Act. Rural Health Care Equity Program.
Existing law, until July 3, 2010, or earlier upon a specified
finding, established the Rural Health Care Equity Program for the
purpose of funding the subsidization and reimbursement of premium
costs, deductibles, coinsurance, and other out-of-pocket health care
expenses paid by employees of State Bargaining Unit 5 living in rural
areas, as defined. Existing law provided for funding and
reimbursement provisions for purposes of the program. Existing law
provided that the program would be operative only to the extent that
funding was provided in the annual Budget Act or another statute and
solely for the benefit of employees of State Bargaining Unit 5.
The bill would reestablish the Rural Health Care Equity Program
until January 1, 2015, or to an earlier date upon a specified
finding, and would extend the benefits to all employees and
annuitants living in rural areas. This bill would provide that the
program would be operative only to the extent that funding is
provided in the annual Budget Act.
The Public Employees' Medical and Hospital Care Act (PEMHCA),
which is administered by the Board of Administration of the Public
Employees' Retirement System (PERS), authorizes the board to contract
for health benefit plans for employees and annuitants, as defined.
Contributions and premiums paid under PEMHCA are deposited in the
Public Employees' Health Care Fund and the Public Employees'
Contingency Reserve Fund, which are continuously appropriated funds.
This bill would make nonsubstantive changes to a provision of the
Public Employees' Medical and Hospital Care Act.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22877 of the
Government Code is amended to read:
22877. (a) As used in this section, the following definitions
shall apply:
(1) "Coinsurance" means the provision of a health benefit plan
design that requires the health benefit plan and state employee
or annuitant to share the cost of hospital or medical expenses
at a specified ratio.
(2) "Deductible" means the annual amount of out-of-pocket medical
expenses that a state employee or annuitant must pay
before the health benefit plan begins paying for expenses.
(3) "Program" means the Rural Health Care Equity Program.
(4) "Rural area" means an area in which there is no board-approved
health maintenance organization plan available for enrollment by
state employees or annuitants residing in the area.
(b) (1) The Rural Health Care Equity Program is hereby established
for the purpose of funding the subsidization and reimbursement of
premium costs, deductibles, coinsurance, and other out-of-pocket
health care expenses paid by eligible employees or annuitants
living in rural areas that would otherwise be covered if the
state employee or annuitant was enrolled in a
board-approved health maintenance organization plan. The program
shall be administered by the Department of Personnel
Administration Human Resources or by a
third-party administrator approved by the Department of
Personnel Administration Human Resources in a
manner consistent with all applicable state and federal laws. The
board shall determine the rural area for each subsequent fiscal year,
at the same time that premiums for health maintenance organization
plans are approved.
(2) Separate accounts shall be maintained within the program for
all of the following:
(A) Employees, as defined in subdivision (c) of Section 3513.
(B) Excluded employees, as defined in subdivision (b) of Section
3527.
(C) State annuitants.
(c) Moneys in the program shall be allocated to the respective
accounts as follows:
(1) The contribution provided by the state with respect to each
employee, as defined in subdivision (c) of Section 3513, who lives in
a rural area and is otherwise eligible, shall be an amount
determined through the collective bargaining process.
(2) The contribution provided by the state with respect to each
excluded employee, as defined in subdivision (b) of Section 3527, who
lives in a rural area and is otherwise eligible, shall be an amount
equal to, but not to exceed, the amount contributed pursuant to
paragraph (1).
(3) The contribution provided by the state with respect to each
state annuitant who lives in a rural area, is not a Medicare
participant, resides in California, and is otherwise eligible, shall
be an amount not to exceed five hundred dollars ($500).
(4) The contribution provided by the state with respect to each
annuitant who lives in a rural area, resides in California,
participates in a supplemental Medicare health benefit plan, and is
otherwise eligible, shall be an amount equal to the Medicare Part B
premiums incurred by the annuitant, not to exceed seventy-five
dollars ($75) per month. The program may not reimburse for penalty
amounts.
(3)
(5) If an eligible employee enters or leaves service
with the state during a fiscal year, contributions for the employee
shall be made on a pro rata basis. A similar computation shall be
used for anyone entering or leaving the bargaining unit, including a
person who enters State Bargaining Unit 5 by promotion during a
fiscal year.
(d) Each fund of the State Treasury, other than the General Fund,
shall reimburse the General Fund for any sums allocated pursuant to
subdivision (c) for employees whose compensation is paid from that
fund. That reimbursement shall be accomplished using the following
methodology:
(1) On or before December 1 of each year, the Department of
Personnel Administration Human Resources
shall provide a list of active state employees who participated
in the program during the previous fiscal year to each employing
department.
(2) On or before January 15 of each year, each department that
employed an active state employee identified by the Department of
Personnel Administration Human Resources
as a participant in the program shall provide the Department of
Personnel Administration Human Resources
with a list of the funds used to pay each employee's salary,
along with the proportion of each employee's salary attributable to
each fund.
(3) Using the information provided by the employing departments,
the Department of Personnel Administration
Human Resources shall compile a list of program payments
attributable to each fund. On or before February 15 of each year, the
Department of Personnel Administration Human
Resources shall transmit this list to the Department of
Finance.
(4) The Department of Finance shall certify to the Controller the
amount to be transferred from the unencumbered balance of each fund
to the General Fund.
(5) The Controller shall transfer to the General Fund from the
unencumbered balance of each impacted fund the amount specified by
the Department of Finance.
(6) To ensure the equitable allocation of costs, the Director of
the Department of Personnel Administration
Human Resources or the Director of Finance may require an audit
of departmental reports.
(e) For any sums allocated pursuant to subdivision (c) for
annuitants, funds, other than the General Fund, shall be charged a
fair share of the contribution provided by the state in accordance
with the provisions of Article 2 (commencing with Section 11270) of
Chapter 3 of Part 1 of Division 3. On or before July 31 of each year,
the Department of Human Resources shall provide the Department of
Finance with the total costs allocated for annuitants in the previous
fiscal year. The reported costs may not include expenses that have
been incurred but not claimed as of July 31.
(f) Notwithstanding any other law and subject to the availability
of funds, moneys within the program shall be disbursed for the
benefit of eligible annuitants. The disbursements shall either
reimburse the annuitant, if not a Medicare participant, for some or
all of the deductible incurred by the annuitant or a family member,
not to exceed five hundred dollars ($500) per fiscal year, or
reimburse the annuitant, if a Medicare participant, for Medicare Part
B premiums incurred by the annuitant, not to exceed seventy-five
dollars ($75) per month. The program may not reimburse for penalty
amounts. These reimbursements shall be provided by the Department of
Human Resources. Notwithstanding any other law, any annuitant who
cannot be located within a period of three months and whose
disbursement is returned to the Controller as unclaimed is ineligible
to participate in the program.
(e)
(g) Notwithstanding any other law and subject to the
availability of funds, moneys within the program shall be disbursed
for the benefit of eligible employees. The disbursements shall
subsidize the preferred provider plan premiums for the employee by an
amount equal to the difference between the weighted average of
board-approved health maintenance organization premiums and the
lowest board-approved preferred provider plan premium available under
this part, and reimburse the employee for a portion or all of his or
her incurred deductible, coinsurance, and other out-of-pocket
health-related expenses that would otherwise be covered if the
employee and his or her family members were enrolled in a
board-approved health maintenance organization plan. These subsidies
and reimbursements shall be provided as determined by the Department
of Personnel Administration Human Resources
, which may include, but is not limited to, a supplemental
insurance plan, a medical reimbursement account, or a medical
spending account plan.
(f)
(h) Subject to subdivision (h),
(j), moneys remaining in an account of the program at the end
of any fiscal year shall remain in the account for use in subsequent
fiscal years, until the account is terminated. Moneys remaining in a
program account upon termination, after payment of all expenses and
claims incurred prior to the date of termination, shall be deposited
in the General Fund.
(g)
(i) The Legislature finds and declares that the program
shall be operated for the exclusive benefit of employees of
State Bargaining Unit 5. employees, annuitants, and
family members.
(h)
(j) This section shall be operative only to the extent
that funding is provided in the annual Budget Act or another
statute and solely for the benefit of employees of State Bargaining
Unit 5. statute.
(i)
(k) This section shall cease to be operative on
July 3, 2010, January 1, 2015, or on an
earlier date if the board makes a formal determination that health
maintenance organization plans are no longer the most cost-effective
health benefit plans offered by the board.
(j) Notwithstanding any other law, on and after July 1, 2009, the
benefits of the Rural Health Care Equity Program shall be available
only to employees in State Bargaining Unit 5, and shall not be
available to any other employees. Pursuant to subdivision (f), any
moneys that remain in the accounts of the program on July 1, 2009,
other than moneys attributable to employees in State Bargaining Unit
5 on that date, shall be deposited in the General Fund. Benefits of
the Rural Health Care Equity Program shall cease to be available to
employees in State Bargaining Unit 5, on and after July 3, 2010, and
any moneys remaining in the accounts of the program shall be
deposited in the General Fund.
SECTION 1. Section 22880 of the Government Code
is amended to read:
22880. (a) The contributions of each employee and annuitant shall
be withheld from the monthly salary or retirement allowance payable
to him or her.
(b) The employer contribution required of the state, as provided
by Sections 22881 and 22883, for any month shall be charged to the
same fund used for payment of salaries and wages from which the
employee contribution is deducted.
(c) The employer contribution required of the state on account of
each annuitant shall be payable from the funds appropriated for that
purpose.