BILL ANALYSIS
AB 820
Page 1
Date of Hearing: May 6, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 820 (Conway) - As Introduced: February 26, 2009
Policy Committee: P.E.R. &
S.S.Vote: 6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill makes the self-funded group legal services plan
currently offered to state employees also available to retirees.
The bill also:
1)Authorizes the Department of Personnel Administration (DPA) to
directly bill a retiree if there are insufficient funds in the
retiree's benefit allowance to pay the premium for the vision
care program.
2)Provides that moneys in the vision care program are
continuously appropriated.
FISCAL EFFECT
1)DPA indicates that administrative costs to expand the legal
plan to retirees would be minor.
2)Ongoing program costs, including administration, would be
covered by retiree contributions.
COMMENTS
1) Rationale . This bill is sponsored by DPA, which asserts that
a self-funded legal service plan would be beneficial to
retirees, who often have even greater needs for routine legal
services than their working counterparts. DPA also indicates
that the lack of continuous appropriation authority is unusual
for benefit programs - particularly self-funded plans where
member contributions are going directly for premium payments.
They assert that providing continuous appropriation authority
AB 820
Page 2
will eliminate an unnecessary administrative burden and ensure
retirees receive services they have paid for without disruption.
The authority to directly bill retirees for their premium
contributions is needed because about 700 members of the program
receive retirement payments that are less than their premium
payments, making a deduction impractical.
2) Background . DPA administers the legal plan, which is a
voluntary, fully employee-paid program designed to provide legal
coverage for eligible employees and dependents. Currently, the
legal plan is only available to active employees and dependents
via post-tax payroll deduction. It is not available to those
who have retired or separated from state service.
DPA also administers a vision care program for its active and
retired employees. Individuals participating in the retiree
program are required to pay 100% of the costs of the premiums
and a small surcharge that covers the costs associated with its
administration. Monthly premiums for the retiree vision program
are deducted from the member's retirement payments.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081