BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 820
Lou Correa, Chair Hearing date: June 8, 2009
AB 820 (Conway) as introduced 2/26/09 FISCAL: YES
STATE GROUP LEGAL SERVICES AND VISION CARE PROGRAMS CHANGES
HISTORY :
Sponsor: Department of Personnel Administration (DPA)
Prior legislation: none
ASSEMBLY VOTES :
PER & SS 6-0 4/22/09
Appropriations 16-0 5/06/09
Assembly Floor 73-0 5/14/09
SUMMARY :
Would make changes to the Vision Care Program for State
Annuitants (Vision Care Program) and the Group Legal Services
Plan (Legal Plan) offered to state employees.
BACKGROUND AND ANALYSIS :
1) Existing law on the Legal Plan:
a) authorizes DPA to enter into contracts to purchase
various insurance benefits for excluded and exempt
employees (managers and supervisors),
b) provides that the individual Memoranda of Understanding
for the 21 bargaining units authorize participation
eligibility for rank-and-file state employees,
c) provides that the existing Legal Plan is a voluntary
and fully employee-paid, designed to meet an individual's
most common personal legal needs, providing comprehensive
legal coverage for eligible employees and their eligible
David Felderstein
Date: 5/27/09 Page 1
dependents,
d) provides that the Legal Plan is only available to
active employees and their eligible dependents via post-tax
payroll deduction, and
e) provides that once state employees separate or retire,
they are no longer eligible to participate in the Legal
Plan.
David Felderstein
Date: 5/27/09 Page 2
2) Existing law on the Vision Care Programs :
a) establishes the Vision Care Program and the Vision Care
Program for State Annuitants Fund, and
c) provides that state retirees participating in the
Vision Care Program are required to pay 100% of the costs
of the premiums and a small surcharge that covers the costs
associated with administering the Vision Care Program.
3) This bill :
a) allows state, legislative, and judicial branch retirees
to participate in the Legal Plan which is currently offered
to state employees, provided the annuitant pays the full
costs of the plan,
b) authorizes the Department of Personnel Administration
(DPA) to directly bill an annuitant if there are
insufficient funds in the annuitant's benefit allowance to
pay the premium for the Vision Care Program, and
c) provides that moneys in the Vision Care Program are
continuously appropriated.
FISCAL EFFECT :
According to the Assembly Appropriations analysis:
a) DPA indicates that administrative costs to expand the
legal plan to retirees would be minor, and
b) ongoing program costs, including administration, would
be covered by retiree contribution.
COMMENTS :
1) Arguments in support
According to the sponsor, DPA:
David Felderstein
Date: 5/27/09 Page 3
"Current state law does not allow state, legislative and
judicial retirees to participate in the Group Legal
Services Plan administered by DPA. Retirees have a
similar, perhaps greater, need for legal services than
active employees. AB 820 allows state, legislative, and
judicial branch retirees to participate in the Group Legal
Services Plan at their own expense."
David Felderstein
Date: 5/27/09 Page 4
"The Vision Care Program for State Annuitants, unlike most
of the state's benefit programs, requires an annual
appropriation. AB 820 would align this funding system to a
continuously appropriated fund, like other benefit
programs, thereby eliminating an unnecessary administrative
burden and ensure retirees receive services they have paid
for without disruption."
According to supporters:
"Additionally, this bill clarifies that these retirees may
also participate in the retiree vision care program at
their own expense with after-tax dollars. There are
approximately 700 retirees who receive retirement checks
that are less than the amount of deducted expenses.
Retirement checks may not be enough to cover the cost of
health care premiums; in such cases, these retirees may pay
any additional vision care premium costs with after-tax
dollars.
2) SUPPORT :
CalPERS Board of Administration
California State Employees Association
3) OPPOSITION :
None to date
David Felderstein
Date: 5/27/09 Page 5
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David Felderstein
Date: 5/27/09 Page 6