BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1814|
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CONSENT
Bill No: AB 1814
Author: Buchanan (D)
Amended: 4/13/10 in Assembly
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 6/10/10
AYES: Corbett, Harman, Hancock, Leno, Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 74-0, 4/29/10 - See last page for vote
SUBJECT : Discrimination in employment
SOURCE : California Teachers Association
DIGEST : This bill provides that the age discrimination
prohibitions of the Fair Employment and Housing Act do not
prohibit an employer from providing health benefits or
health care reimbursement plans to retired persons that are
altered, reduced, or eliminated when the person becomes
eligible for Medicare health benefits.
ANALYSIS : Existing state law, the Fair Employment and
Housing Act, generally prohibits discrimination in
employment on the basis of age with respect to persons aged
40 years and older. (Gov. Code Sec. 12940.)
Existing federal law, the Age Discrimination in Employment
Act, likewise generally prohibits discrimination in
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AB 1814
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employment on the basis of age with respect to persons aged
40 years and older. (29 U.S.C. Sec. 621 et seq.)
Existing federal law contains an exemption from the
prohibition against age discrimination for the provision of
health benefits for retired participants that are altered,
reduced, or eliminated when the participant is eligible for
Medicare health benefits whether or not the participant
actually enrolls in the other benefit program. (29 C.F.R.
Sec. 1625.32.)
This bill provides that the prohibition on age
discrimination provided for in the Fair Employment and
Housing Act does not prohibit an employer from providing
health benefits or health care reimbursement plans to
retired persons that are altered, reduced, or eliminated
when the person becomes eligible for Medicare health
benefits.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/29/10)
California Teachers Association (source)
ARGUMENTS IN SUPPORT : According to the author's office,
this bill responds to litigation brought by a retiree
against a school district in Contra Costa County. The
plaintiff in that case was apparently denied a contractual
benefit because she retired after she was eligible for
Medicare and the benefit was intended to be a bridge to
Medicare. She initiated a law suit against both the school
district employer and the employee organization claiming
age discrimination under the FEHA. The District
subsequently filed a cross complaint for declaratory relief
against the employee organization and 24 retirees,
threatening to recoup benefits already paid to those
retirees and to cease paying future benefits if the
collective bargaining agreement that provided the retiree
health benefits was found to be illegal.
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The author's office argues that if this type of litigation
proliferates under the FEHA, California employers will be
discouraged from offering these modest retiree health
benefits, which currently enable employees to be covered by
medical insurance if they choose to retire before they are
Medicare eligible.
In support of this bill, the California Teachers
Association writes, "The importance of having access to
health care is paramount for a teacher moving into
retirement, particularly as more and more school districts
are no longer offering retiree health benefits (over 70
percent offer no retiree health benefits). AB 1814 simply
codifies what is already permissible at the federal level
to ensure local entities clearly understand that a "bridge"
to retiree health benefits is permissible."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Knight, Lieu, Logue, Ma,
Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin,
Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Tran, Villines,
Yamada, John A. Perez
NO VOTE RECORDED: Bass, Caballero, Jones, Bonnie
Lowenthal, Torrico, Vacancy
RJG:do 6/29/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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