BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
65 (Hayashi)
Hearing Date: 8/27/2009 Amended: 7/23/2009
Consultant: Maureen Ortiz Policy Vote: PE&R 4-2
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BILL SUMMARY: AB 65 creates a self-funded vision care program
for retired local members, school members, and University of
California members to be administered by CalPERS by January 1,
2011.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Program/admin costs ------entirely paid by
premiums--------- Special*
Start-up costs -----one time
$325----- Special*
Retired Public Employees Vision Care Program Fund
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STAFF COMMENTS: SUSPENSE FILE.
Although AB 65 specifies that the program and administrative
costs will be paid by participants who choose to enroll in the
vision care program, CalPERS has indicated that minimal start-up
costs would likely be $325,000 before the program can be fully
implemented. After that time, it is anticipated that fees
charged to participants would completely support the
administrative functions. However, CalPERS has indicated that
ongoing administration of this program would require four staff
positions to administer, maintain, and audit the system side of
the program with costs of $280,000 annually. It is uncertain at
this time whether participation and the amount of the fee that
would need to be charged would actually be sufficient to
entirely fund this program. The full costs of the vision care
provider will be paid from premiums by retired members who
choose to participate.
AB 65 creates the Retired Public Employees Vision Care Program
Fund for deposit of the premiums. As provided in the bill, the
premiums charged to participants will be in an amount sufficient
to cover the full costs of the program. There are over 2,400
contracting agencies that would be eligible to participate in
this program including approximately 333,000 retirees.
Current law establishes the Vision Care Program for State
Annuitants, which is administered by the Department of Personnel
Administration (DPA); the County Retirement System Vision Care
Program for retired employees of counties operating retirement
systems under the county Employees' Retirement Law of 1937; and,
the
California State University Annuitant Vision Care Program
administered by the CSU Chancellor.
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AB 65 (Hayashi)
To date, approximately 51,000 annuitants out of 105,000 eligible
retirees have enrolled in the Vision Care Program for State
Annuitants administered by DPA. Administrative costs for that
program are offset by a $0.46 charge for each enrollment.
Premiums are about $9 per month for the annuitant, $16 for an
annuitant and spouse, and $18 per month for a family of three or
more. Those charges include the costs of administering that
program.
The bill provides that a contract with a vision care provider
will not take effect until the funds have been made available to
cover the startup costs of the program. AB 65 has a delayed
implementation date of January 1, 2011 to order to provide
twelve months for the collection of premiums to begin.
AB 65 provides that CalPERS has no duty to notify or locate any
annuitant who may be eligible to enroll, or to provide names or
addresses to any person, agency, or entity for the purpose of
notifying any annuitant of the program. In addition, the
CalPERS board will have the ability to terminate the program at
any time it is determined not to be economically feasible.
This bill is similar to AB 1997 (Hayashi) which was vetoed by
the Governor last year due to the 2008-09 State Budget delay.