BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
820 (Conway)
Hearing Date: 6/29/2009 Amended: As Introduced
Consultant: Maureen Ortiz Policy Vote: PE&R 7-0
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BILL SUMMARY: AB 820 makes changes to the Vision Care Program
for State Annuitants and the group legal service plan offered to
state employees.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Authorization for annuitants
to participate in legal plan -------costs fully paid by
retirees----- General
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STAFF COMMENTS: Specifically, AB 820 does the following:
1) Allows state annuitants to participate in the group
legal service plan which is currently offered to state
employees, provided the annuitant pays the full costs of
the plan (the current rate is $9.84 per month for an
individual, and $17.39 for family coverage),
2) 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 for State
Annuitants, and
3) Provides that moneys in the Vision Care Program for
State Annuitants Fund are continuously appropriated.
Existing law authorizes the DPA to enter into contracts to
provide eligible state employees and their dependents with the
option to participate in a comprehensive group legal service
plan. The plan is currently administered through the ARAG
Insurance Company. There are over 40,000 enrollees in this
plan, and the participants are charged after-tax premiums
through payroll deduction that cover all of the costs of the
benefit. AB 820 will authorize state retirees to also
participate in the group legal service plan and requires them to
pay the full costs through monthly premiums.
AB 2242 (Chapter 611 of 2006) established the Vision Care
Program for State Annuitants which authorizes retirees to
participate in the Vision Care Program provided they pay the
full costs of the program, including administrative expenses.
The funds in this program are not currently continuously
appropriated, but instead, are available only upon appropriation
by the Legislature. According to DPA, since the "open
enrollment" period occurs in September of each year, the amount
of funding that must be appropriated and paid to the Vision
Service Plan is not known at the time the budget is enacted each
year. In addition, many of the state pension and benefit
related programs are continuously appropriated.
This bill is similar to SB 1601 (Negrete McLeod) which was
vetoed by the Governor last year due to 2008-09 State Budget
delay.