BILL NUMBER: SB 1114	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Walters

                        FEBRUARY 19, 2014

   An act to amend Section 22879 of, and to add Section 22875.1 to,
the Government Code, relating to postretirement health care benefits.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1114, as introduced, Walters. Postretirement health care
benefits.
   Existing law generally authorizes a state employee or annuitant to
enroll in an approved health benefit plan administered by the Board
of Administration of the Public Employees' Retirement System pursuant
to the Public Employees' Medical and Hospital Care Act. Existing law
establishes percentages for levels of benefit coverage afforded
under the approved health benefit plan in which the employee or
annuitant is enrolled.
   Existing law specifies the number of years of state service a
state employee needs to receive the full employer contribution
payable for annuitants and the rate at which the employer
contribution is required to be paid to an annuitant based on credited
state service at the time of retirement.
   This bill would prohibit a state employee who is hired by the
state for the first time on or after January 1, 2015, from receiving
any portion of the employer contribution payable for annuitants
unless the employee is credited with 15 years of state service at the
time of retirement, at which point the employer contribution would
be 50%. The bill would increase the employer contribution payable for
postretirement health benefits for an employee subject to these
provisions by 5% each credited year of service, reaching 100% for an
annuitant with 25 years of credited state service at the time of
retirement. The bill would also prohibit an annuitant subject to this
section from receiving an employer contribution towards health
benefits that is more generous than that provided to active state
civil service employees.
   Existing law requires the board to pay to an employee or annuitant
who is enrolled in, or whose family member is enrolled in, a
Medicare health benefit plan the amount of monthly premiums, not
exceeding the difference between the maximum employer contribution
and the amount contributed by the employer toward the cost of
premiums.
   This bill would require an annuitant to use medicare benefits, if
he or she is eligible to receive those benefits, to the fullest
extent possible.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 22875.1 is added to the Government Code, to
read:
   22875.1.  (a) Notwithstanding Sections 22870, 22871, 22873, and
22874, a state employee who becomes a state member of the system on
or after January 1, 2015, shall not receive any portion of the
employer contribution payable for annuitants, unless the employee is
credited with 15 years of state service at the time of retirement.
   (b) A state employee subject to this section shall not be eligible
to receive the full employer contribution payable for an annuitant
unless he or she has 25 years of credited state service at the time
of retirement.
   (c) Notwithstanding any other law, an annuitant subject to this
section shall not receive a contribution towards health benefits that
is more generous than that provided to state employees.
   (d) The percentage of the employer contribution payable for
postretirement health benefits for an employee subject to this
section shall be based on the completed years of credited state
service at retirement as shown in the following table:
                              Credited Years
Years of Service             Percentage
Contribution
                              of Employer
                              Contribution
15.......................... 50
16.......................... 55
17.......................... 60
18.......................... 65
19.......................... 70
20.......................... 75
21.......................... 80
22.......................... 85
23.......................... 90
24.......................... 95
25 or more.................. 100


  SEC. 2.  Section 22879 of the Government Code is amended to read:
   22879.  (a) The board shall pay monthly to an employee or
annuitant who is enrolled in, or whose family member is enrolled in,
a Medicare health benefit plan under this part the amount of the
Medicare Part B premiums, exclusive of penalties, except as provided
in Section 22831. This payment  may   shall
 not exceed the difference between the maximum employer
contribution and the amount contributed by the employer toward the
cost of premiums for the health benefit plan in which the employee or
annuitant and his or her family members are enrolled.  No
  A  payment  may   shall not
 be made in any month if the difference is less than one dollar
($1).
   (b) This section shall be applicable only to state employees,
annuitants who retired while state employees, and the family members
of those persons.
   (c) With respect to an annuitant, the board shall pay to the
annuitant the amount required by this section from the same source
from which his or her allowance is paid. Those amounts are hereby
appropriated monthly from the General Fund to reimburse the board for
those payments.
   (d) There is hereby appropriated from the appropriate funds the
amounts required by this section to be paid to active state
employees. 
   (e) Notwithstanding any other law, an employee or annuitant who is
enrolled in, or whose family is enrolled in, a Medicare health
benefit plan shall use those benefits to the fullest extent possible.