BILL ANALYSIS �
SB 1294
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Date of Hearing: June 20, 2012
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Warren T. Furutani, Chair
SB 1294 (Berryhill) - As Amended: June 13, 2012
SENATE VOTE : 37-0
SUBJECT : Public employee health benefits: Mariposa County.
SUMMARY : Allows Mariposa County to provide a higher employer
contribution for its retirees than for its active employees, and
require it be executed through a memorandum of understanding
(MOU) or by a resolution adopted by a majority of the County
Board of Supervisors. Specifically, this bill :
1)Allows Mariposa County, subject to a MOU or, for employees not
represented by a bargaining unit, upon adoption of a
resolution by the Board of Supervisors, to:
a) Establish employer contributions for employees of no
less than the statutorily required amount.
b) Provide an employer contribution that is higher for
retirees than for active employees. This provision will
only apply to employees who retired prior to the effective
date of the MOU or resolution, regardless of any
retroactivity required by the MOU or resolution.
2)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.
3)Specifies that the obligations or benefits of either the
annuitants or the county that exist at the time of the bill's
enactment will not be affected.
EXISTING LAW :
1)Establishes the Public Employees' Medical and Hospital Care
Act (PEMHCA), administered by CalPERS, which creates a
statutory framework for state employee and retiree health care
benefits and allows local public agencies to voluntarily
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contract with CalPERS for health care coverage for their
employees and retirees.
2)Requires a local public employer who contracts for PEMHCA
coverage for active employees to also provide PEMHCA coverage
for retirees.
3)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.
4)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% per year until the
retirees receive the same premium amounts as active employees.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senare Rule 28.8, negligible state costs.
COMMENTS : Because PEMCHA requires contracting agencies to
provide retirees the same employer health care premium
contributions as current employees, Mariposa County is
sponsoring SB 1294 to ensure its current retirees will not
experience a reduction in benefits as a result of the change it
has negotiated in employer contributions for current employees
and future retirees.
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.
"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
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existing statute."
According to the sponsor, Mariposa County Board of Supervisors,
"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."
REGISTERED SUPPORT / OPPOSITION :
Support
Mariposa County Board of Supervisor (Sponsor)
Opposition
None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957