BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 65
Lou Correa, Chair Hearing date: June 22, 2009
AB 65 (Hayashi) as amended 6/01/09 FISCAL: YES
PERS: SELF-FUNDED VISION CARE FOR RETIRED LOCAL, SCHOOL AND
UNIVERSITY MEMBERS
HISTORY :
Sponsor: Retired Public Employees Association (RPEA)
Prior legislation: AB 1997 (Hayashi) 2008
Vetoed
SB 235 (Negrete McLeod)
Chapter 344 of 2007
AB 1288 (Hayashi)
Chapter 331 of 2007
AB 2242 (PER&SS Committee)
Chapter 611 of 2006
ASSEMBLY VOTES :
PER & SS 5-1 4/01/09
Appropriations 12-5 5/28/09
Assembly Floor 51-24 6/03/09
SUMMARY :
Would establish a self-funded vision care program for retired
local members, school members, and university members to be
administered by the California Public Employees' Retirement
System (PERS) effective on or before January 1, 2011.
BACKGROUND AND ANALYSIS :
1) Existing law :
a) requires the Department of Personnel Administration
(DPA) to establish and administer the Vision Care Program
for State Annuitants,
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b) provides, pursuant to Chapter 611 of 2006 , that the
premium cost to participate in the Vision Care Program for
State Annuitants is paid for entirely by the participant,
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c) establishes, pursuant to Chapter 331 of 2007 , the
County Retirement System Vision Care Program to provide
vision care benefits to retired employees of counties
operating retirement systems under the County Employees'
Retirement Law of 1937 ('37 Act), providing that the
retiree is responsible for the full cost of the vision care
premium, and
d) allows, pursuant to Chapter 344 of 2007 , annuitants of
the California State University (CSU) system to participate
in the newly created California State University Annuitant
Vision Care Program, and requires the Office of the
Chancellor of the CSU to administer the program for all
participating annuitants of the institution.
2) This bill :
a) authorizes PERS to contract with one or more vision
care plans, as specified, in order to provide the vision
care program for retired PERS local, school, and university
members,
b) 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,
c) creates the Retired Public Employees Vision Care
Program Fund in the State Treasury, as specified, where all
premiums received from participants in the program will be
deposited,
d) specifies that any contract entered into by the PERS
Board will only take effect if funds have been made
available to cover the program's startup costs,
e) specifies that the vision care premiums are to be used
for the cost of providing benefits to enrollees, the
payment of claims for vision care benefits, administrative
costs, and any reasonable startup costs incurred by the
PERS Board,
f) allows the PERS Board to discontinue the program, upon
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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, and
g) requires the PERS Board to implement the program on or
before January 10, 2010.
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Date: 6/02/09 Page 4
FISCAL EFFECT :
According to the Assembly Appropriations Committee analysis:
"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.
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) Arguments in support
According to the sponsor:
"Vision care is an important, yet under appreciated
preventive health care service. In 2006, the National
Institute of Health estimated that over 11 million
Americans had an uncorrected visual impairment. Vision
loss is often accepted as a normal part of aging, but
regular eye exams and conscious vision care can make a
difference - not just in how well we see, but in our
overall health and quality of life. Eye exams can detect
diseases, such as diabetes and hypertension, that otherwise
might go undiagnosed and therefore untreated. As
Californians live longer lives, maintaining good vision is
an important part of staying active and independent."
Supporters conclude:
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"AB 65 will make vision care available for retired local
government employees similar to the vision care now
available for retired state employees. This legislation
will allow them the necessary access to vision care
treatment, at an affordable price, resulting in a greater
number of retirees and California residents utilizing
vision care services."
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Date: 6/02/09 Page 6
2) Similar bill vetoed last year
This bill is similar to AB 1997 (Hayashi) of 2008 which was
vetoed by the Governor due to the 2008-2009 State Budget
delay. The veto message states:
"The historic delay in passing the 2008-2009 State Budget
has forced me to prioritize the bills sent to my desk at
the end of the year's legislative session. Given the
delay, I am only signing bills that are the highest
priority for California. This bill does not meet that
standard and I cannot sign it at this time."
3) SUPPORT :
American Federation of State, County and Municipal
Employees (AFSCME)
California Alliance for Retired Americans (CARA)
California Federation of Teachers (CFT)
California Professional Firefighters (CPF)
CalPERS Board of Administration, support if amended
Glendale City Employees Association
Organization of SMUD Employees
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
4) OPPOSITION :
None to date
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