BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1294
Gloria Negrete McLeod, Chair
Hearing date: April 18, 2012
SB 1294 (Berryhill) as amended 4/09/12 FISCAL: YES
PUBLIC EMPLOYEES MEDICAL AND HOSPITAL CARE ACT: MARIPOSA
COUNTY
HISTORY :
Sponsor: Mariposa County Board of Supervisors
Prior legislation: AB 2544, Pavley
Chapter 862, Statutes of 2006
AB 468, Hayashi
Chapter 320, Statutes of 2009
AB 2510, Fletcher
Chapter 600, Statutes of 2010
SUMMARY :
SB 1294 ensures that current Mariposa county retirees will
not receive a reduction in their retiree health care benefits
as a result of bargaining agreements to change the existing
health plan design with current active employees.
BACKGROUND AND ANALYSIS :
1) Existing law :
a) requires that public employers and official employee
representatives collectively bargain over issues relative
to wages and working conditions.
b) establishes the Public Employees Medical and Hospital
Care Act (PEMHCA), administered by the Public Employees'
Retirement System (CalPERS), which creates a statutory
framework for state employee and retiree health care
benefits and allows local public agencies to voluntarily
contract with CalPERS for health care coverage for their
employees and retirees.
Pamela Schneider
Date: 4/16/12 Page 1
c) requires a local public employer who contracts for
PEMHCA coverage for active employees to also provide
PEMHCA coverage for retirees.
d) requires, as a specific contracting condition, that the
local public contracting employer pay the same level of
premiums for active employees as for retirees, and that
the employer contribution be no less than $97 per month
(as set in 2009), adjusted annually for cost of living
increases since that time.
e) makes an exception to the equal premium rule by
allowing an employer to establish a lower premium for
retirees for a time, but in those cases, requires the
employer to incrementally increase premiums for retirees
by 5 percent per year until the retirees receive the same
premium amounts as active employees.
2) This bill :
a) allows Mariposa County, subject to a memorandum of
understanding (MOU) or upon resolution by the board of
Supervisors, to:
i) Establish employer contributions for employees of no
less than the statutorily required amount.
ii) Provide an employer contribution that is higher for
retirees than for active employees.
b) requires that these changes will not apply to any
employee who retired before the effective date of the
MOU or resolution, and further specifies, regardless of
any retroactivity required by the MOU or resolution,
that any employee who retires before the MOU is signed
or the resolution is adopted shall not be affected by
these changes.
c) requires Mariposa County to provide CalPERS with
notification of the MOU agreement or resolution and to
provide any necessary information in order to implement
the requirements of these changes.
Pamela Schneider
Date: 4/16/12 Page 2
d) makes findings and declarations that a special law is
necessary to enact these changes and that a general law
cannot be made applicable within specific constitutional
meanings due to the unique circumstances of Mariposa
County with respect to public employer and employee
contributions to health care coverage.
COMMENTS :
1) Concerns of the PE&R Committee : This area of the
Government Code defines "board" to mean the board of
CalPERS. The bill references a "resolution adopted by a
majority of the board" (paragraph (a) (1)) that is
intended to apply to the Mariposa County Board of
Supervisors. The bill should be amended to specify the
county board of supervisors since it incorrectly
references the CalPERS board as currently written.
Additionally, the bill is intended to grandfather
retiree health benefits for those who retire prior to
enacting the agreement outlined in the bill. In order
to clarify the bill's intent, the author has agreed to
amend the bill with the attached committee amendments
prior to having the bill referred out of the committee.
2) Argument in Support :
According to the author:
"The county has negotiated a change to their benefit
package, which would reduce the health insurance benefit
for some current employees. This change also eliminates
an automatic escalator in benefits which was incorporated
in some, but not all, of the County's labor agreements.
Pamela Schneider
Date: 4/16/12 Page 3
At this time the employees' overall compensation would
not change; however, the health insurance benefit is
being adjusted. For many employees it will increase, but
others will see a decrease. Because the Public
Employees' Medical and Hospital Care Act requires the
county to provide retirees exactly the same health
insurance benefit as current employees, when this program
is enacted some of the County retirees would see a
reduction in their health benefits, thus running contrary
to existing statute.
SB 1294 would allow Mariposa County to provide current
CalPERS retirees with a different level of health
insurance benefit than will be provided to current
employees. This would only apply to those who have
already retired. This change will ensure that actions
taken by the County will not negatively impact retirees'
health benefits."
The sponsor states the following:
"In order to address disparate treatment of County
employees' health benefits, the Mariposa County Board of
Supervisors has recently negotiated new terms with each
of the County's bargaining units. The agreed-upon terms
now provide equal medical insurance benefits for all
county employees."
"An unintended consequence has been a reduction in
medical insurance benefits for some Mariposa County
retirees. Since this was not their intent, the Board of
Supervisors believes it is important to take whatever
actions are possible to allow these retirees to keep
their current level of medical insurance benefits.
Senate Bill 1294 provides the legal means for the County
to "grandfather" current retirees medical insurance
benefits at their present level."
2) SUPPORT :
Mariposa County Board of Supervisors, Sponsor
Pamela Schneider
Date: 4/16/12 Page 4
3) OPPOSITION :
None to date
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Pamela Schneider
Date: 4/16/12 Page 5