BILL ANALYSIS Ó
AB 1630
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(Without Reference to File)
CONCURRENCE IN SENATE AMENDMENTS
AB
1630 (Committee on Budget)
As Amended August 30, 2016
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
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|ASSEMBLY: |51-26 |(April 28, |SENATE: |32-6 |(August 31, |
| | |2016) | | |2016) |
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Original Committee Reference: BUDGET
SUMMARY: Provides legislative ratification of the memorandum of
understanding (MOU) agreed to by the state and bargaining unit
(BU) 2, California Attorneys, Administrative Law Judges and
Hearing Officers in State Employment (CASE).
The Senate amendments delete the Assembly version of the bill,
and instead:
1)Provides legislative ratification of the memorandum of
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understanding (MOU) agreed to by the state and bargaining unit
(BU) 2, California Attorneys, Administrative Law Judges and
Hearing Officers in State Employment (CASE).
2)Amends the definition of State Peace officer / firefighter
member to mean the Sergeant-at-Arms of each house of the
Legislature who has been designated as peace officers in Penal
Code Section 830.36(a), excluding the Chief Sergeant-at-Arms
of the Senate.
EXISTING LAW:
1)Establishes the Ralph C. Dills Act, which requires the state
to collectively bargain with the exclusive representatives of
employee groups (i.e. bargaining units) regarding wages and
working conditions, and to define negotiated agreements in
MOUs.
2)Establishes the California Department of Human Resources
(CalHR) as the official representative of the Governor in all
matters related to collective bargaining with state employees.
3)Requires that any MOU between the state and an exclusive
representative must be ratified by the Legislature.
4)Establishes the California Public Employees' Retirement System
(CalPERS), which administers health and retirement benefits
for state employees.
5)Requires the Legislative Analyst's Office (LAO) to analyze all
state MOUs and to provide analyses of an MOU and its fiscal
impact to the Legislature within 10 days of receipt of an MOU
from CalHR.
6)Provides that fully vested state retirees (e.g., with 20 or
more years of state employment) are entitled to an employer
contribution for retiree health care equal to 100% of the
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weighted average premium of the four health plans most highly
utilized by all members. Dependents are eligible for a
contribution based on 90% of the average additional premiums
paid for dependents during the benefit year in which the
formula applied. This is referred to as the 100/90 formula.
7)Requires the Medicare-eligible retirees enroll in Medicare and
chose Medicare-coordinated health plan. Since these plans may
be cheaper than non-Medicare (or "Basic" plans), thus
resulting in some portion of the employer contribution going
unused, current law requires that any unused portion of the
100/90 formula contributions may be applied to reimburse
retirees for the costs of Medicare Part B premiums. These
reimbursements are made in the form of an additional payment
to the retiree on the retirement warrant up to the cost of the
Part B premium. Whether or not a retiree receives Medicare
Part B reimbursement in full or in part depends upon the cost
of that retiree's health plan.
8)Provides that most state employees (those hired after 1985 or
1989, depending on class) must work for 10 years to receive
50% of the 100/90 formula, with an additional 5% per year of
service until, after 20 years, they are vested to receive 100%
of the 100/90 formula. Individuals hired prior to 1985 or
1989 could be subject to either five or 10 year vesting for
full coverage of the 100/90 formula.
9)Provides that retirees who were covered in certain bargaining
units while actively employed will receive an employer retiree
health contribution based on the 80/80 formula (i.e. 80% of
the weighted average premium of the four health plans most
highly utilized by all members).
10)Provides that all employer contribution for active state
employee health care shall be determined through collective
bargaining.
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FISCAL EFFECT: Appropriates $32,558,000 for BU 2 for 2016-17.
COMMENTS: The following information summarizing the general
provision of the MOU was provided by CalHR:
Number of Employees: The BU 2 agreement affects approximately
3,890 full-time equivalents.
Health Benefits:
1)Employer Contribution for Active State Employees
a) The state's monthly consolidated benefit contribution
for each employee shall continue to be a flat dollar amount
equal to 80% of the weighted average of the basic health
benefit plan premiums of the four largest enrolled basic
health plans. For each employee with enrolled family
members, the employer shall continue to contribute an
additional flat dollar amount equal to 80% of the weighted
average of the additional premiums. The flat dollar
amounts shall be adjusted as appropriate pursuant to the
formulas on January 1, 2017, January 1, 2018, and January
1, 2019.
2)Employer Contribution for Future Retirees
a) Employees first hired on or after January 1, 2017, will
receive an employer contribution for retiree health
benefits based on an "80/80" formula. Retirees and their
dependents enrolled in a basic health benefit plan will
receive an employer contribution equal to 80% of the
weighted average premium of the four largest basic health
benefit plans based on state active employee enrollment.
Retirees and their dependents enrolled in a Medicare health
benefit plan will receive an employer contribution equal to
80% of the weighted average premium of the four largest
Medicare health benefit plans based on state retiree
enrollment.
3)Prefunding of Other Post-Employment Benefits
a) The state and Bargaining Unit (Unit) 2 members will
prefund retiree healthcare with the goal of reaching 50%
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cost sharing of actuarially determined total normal cost
for employer and employees by July 1, 2019. The state and
employees will each make the following contributions:
i) Effective July 1, 2017, 0.7% of pensionable
compensation.
ii) Effective July 1, 2018, an additional 0.6% for a
total of 1.3% of pensionable compensation.
iii) Effective July 1, 2019, an additional 0.7% for a
total of 2.0% of pensionable compensation.
4)Post-Employment Health and Dental Vesting Schedule
a) All employees first employed by the state on or after
January 1, 2017, will be subject to an extended vesting
schedule providing 50% of the employer contribution upon
completion of 15 years of state service, increasing 5% for
each additional year of service, until the employee is 100%
vested at 25 years of state service.
5)Medicare Part B Supplemental Benefit
a) All employees first hired on or after January 1, 2017,
will no longer be eligible to use the employer contribution
for a retiree health benefit plan for Medicare Part B
premiums.
Compensation:
1)General Salary Increase (GSI)
a) Effective the first day of the pay period following
ratification, Unit 2 employees shall receive a 5% GSI.
b) Effective July 1, 2017, Unit 2 employees shall receive a
5% GSI.
c) Effective July 1, 2018, Unit 2 employees shall receive a
4% GSI.
Miscellaneous:
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1)Prohibits the implementation of a furlough program or a
mandatory Personal Leave Program during the first year of the
agreement. Any furlough during the second or third year must
be authorized pursuant to an act of the Legislature (Article
9.21).
2)Effective May 1, 2017, and depending on the availability of
departmental funds, the amount of leave that can be cashed out
each year shall increase from 20 hours to 80 hours (Article
9.23).
3)Removes the requirement that a new employee must work two
years before receiving the full employer health contribution
for dependents (Article 11.1).
4)Effective the first day of the pay period following
ratification, the lodging reimbursement rate shall increase
from $150 to $250 for San Francisco (Article 12.1).
5)Incorporates the Wounded Warriors Transitional Leave Act SB
221 (Jackson), Chapter 794, Statutes of 2015, which provides
up to 96 hours of additional sick leave for an employee hired
on or after January 1, 2016, who is a military veteran with a
service-connected disability rated 30 percent (New Article).
Duration: July 1, 2016 through July 1, 2019
Analysis Prepared by:
Genevieve Morelos / BUDGET / 916-319-2099 FN:
00050400005040
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