BILL ANALYSIS
AB 65
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Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 65 (Hayashi) - As Introduced: December 9, 2008
Policy Committee: P.E.R. &
S.S.Vote: 5-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes a self-funded vision care program for
local, school, and university members of the California Public
Employees' Retirement System (CalPERS) and requires CalPERS to
administer the program by no later than January 1, 2011. The
bill also:
1) Authorizes CalPERS to contract with one or more vision care
plans to provide the benefits.
2)Specifies that the retiree electing coverage is responsible
for the monthly vision care premium and requires the premium
to be deducted from the participant's monthly retirement
allowance.
3)Allows premiums to cover costs of providing benefits,
administrative costs, and reasonable startup costs incurred by
CalPERS.
4)Specifies that any contract entered into by the CalPERS Board
will only take effect if funds have been made available to
cover the program's startup costs.
5)Allows the CalPERS Board to discontinue the program, upon
written notice to the enrollees, if the Board determines that
it is not economically feasible to continue its operation.
Enrollees must be informed of the plan termination at least
three months prior to the termination date.
FISCAL EFFECT
AB 65
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1) Annual costs for vision care are entirely self-funded
through premiums charged to members participating in the
program.
The premiums currently charged to state retirees
participating in a similar program administered by the
Department of Personnel Administration are $9 per month for
the member, $17 per month for the member and one dependent,
and $18 per month for a member and two or more dependents.
2) Administrative costs to CalPERS, about $200,000 per year,
will also be covered by the premiums charged to members.
First year costs would need to be covered through a loan
either from the General Fund or from the contracting vision
care plans. These loans would be repaid from premium payments
collected over time.
COMMENTS
1)Rationale . The author asserts that vision care is an important
yet under-appreciated preventive health care service. The
bill is proposed so that vision care currently available to
retired state employees can also be made available to retirees
of local governments, schools and universities contracting
with CalPERS.
2)Background . In recent years, several bills were enacted that
permit state and certain local retirees to voluntarily
participate in self-funded vision care programs. In all cases,
these programs are fully funded by contributions by the
retirees choosing to participate in the programs. Key
legislation includes:
a) AB 2242 (P.E.R. and S.S. Committee), Chapter 611,
Statutes of 2006, which requires the Department of
Personnel Administration to establish and administer the
voluntary vision program for state retirees. Roughly one
half of the 105,000 eligible retirees currently participate
in this program.
b) AB 1288 (Hayashi), Chapter 331, Statutes of 2007,
established the County Retirement System Vision Care
Program to provide vision care benefits to retired
employees of counties operating retirement systems under
AB 65
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the County Employees' Retirement Law of 1937 ('37 Act).
c) SB 235 (Negrete McLeod), Chapter 344, Statutes of 2007,
allows annuitants of the California State University (CSU)
system to participate in the California State University
Annuitant Vision Care Program. This bill requires the
Office of the Chancellor of the CSU to administer the
program for all participating annuitants of the
institution.
3)Related Legislation . This bill is similar to AB 1997 (Hayashi)
of 2008. That measure was vetoed by the Governor, who cited
the 2008-2009 state budget delay and the lack of time for
review as the basis for the veto.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081