BILL NUMBER: AB 2383 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 26, 2000
AMENDED IN ASSEMBLY APRIL 6, 2000
INTRODUCED BY Assembly Member Keeley
FEBRUARY 24, 2000
An act to add and repeal Section 25200 of the Education Code,
and to amend Section 22754 of the Government Code, relating to
the Public Employees' Medical and Hospital Care Act
benefits , and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 2383, as amended, Keeley. Public Employees' Medical
and Hospital Care Act employee benefits :
covered employees : retiree health benefits .
Existing law, the Public Employees' Medical and Hospital Care Act,
defines "employee" for purposes of eligibility for benefits under
the act and excludes from that definition specified officers and
employees who are employed less than half time. Employee
contributions under the act are deposited in the Public Employees'
Health Care Fund, a continuously appropriated fund.
This bill would authorize contracting agencies, as defined, and
school employers to include within that definition certain employees
who are employed less than half time or as specified. By expanding
eligibility for benefits under the act, the bill would increase the
contributions to a continuously appropriated fund, thereby making an
appropriation.
Existing law, the Teachers' Retirement Law, provides that the
State Teachers' Retirement System shall develop a program to provide
health care benefits for members, beneficiaries, children, and
dependent parents, as defined. Under existing law, employers
contribute monthly to the Teachers' Retirement Fund 8% of creditable
compensation, as defined.
This bill would require the Teachers' Retirement Board to
calculate the actuarial cost of providing specified health benefits
to retired members of the Defined Benefit Program of the Teachers'
Retirement Plan; provide that each employer who provides those health
benefits to its retired members shall receive a credit against its
employer contributions to the system, based on that actuarial cost,
as specified; and allocate up to $2,000,000,000 to offset those
credits.
The bill's provisions would become inoperative on July 1, 2011,
and would be repealed January 1, 2012.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22754 of the Government Code is amended to
read:
22754. As used in this part the following definitions, unless the
context otherwise requires, shall govern the interpretation of
terms:
(a) "Board" means the Board of Administration of the Public
Employees' Retirement System.
(b) "Employee" means:
(1) Any officer or employee of the State of California or of any
agency, department, authority, or instrumentality of the state
including the University of California, or any officer or employee
who is a local or school member of the Public Employees' Retirement
System employed by a contracting agency that has elected to be or
otherwise has become subject to this part, or who is a member or
retired member of the State Teachers' Retirement System employed by
an employer who has elected to become subject to this part, or who is
an employee or annuitant of a special district or county subject to
the County Employees Retirement Law of 1937 (Chapter 3 (commencing
with Section 31450) of Part 3 of Division 4 of Title 3) that has
elected to become subject to this part, or who is an employee or
annuitant of a special district, as defined in subdivision (i), that
has elected to become subject to this part, except persons employed
on an intermittent, irregular or less than half-time basis, or
employees similarly situated, or employees in respect to whom
contributions by the state for any type of plan or program offering
prepaid hospital and medical care are otherwise authorized by law.
(2) Any officer or employee who participates in the retirement
system of a contracting agency as defined in paragraph (2) of
subdivision (g) that has elected to become subject to this part,
except persons employed less than half time or who are otherwise
determined to be ineligible.
(3) Any annuitant of the Public Employees' Retirement System
employed by a contracting agency as defined in subdivision (g) that
has elected to become subject to this part who is a person retired
under Section 21228.
(4) Notwithstanding paragraphs (1) and (2), a contracting agency
or school employer may, by resolution filed with the board, deem all
permanent employees, except members of the State Teachers' Retirement
System, who have an appointment of six months or longer, but who are
employed on less than a half-time basis, to be "employees" subject
to this part.
(5) Notwithstanding paragraphs (1) and (2), a contracting agency
or school employer with employees who are members of the State
Teachers' Retirement System may, by resolution filed with the board,
deem the following to be "employees" subject to this part:
(A) Regular employees who have an appointment of six months or
longer, but who are employed on less than a half-time basis.
(B) Part-time faculty employees who are hired on a semester basis.
(C) Long-term substitutes who are hired for at least one-half of
the school year.
(c) "Carrier" means a private insurance company holding a valid
outstanding certificate of authority from the Insurance Commissioner
of the state, a medical society or other medical group, a nonprofit
hospital service plan qualifying under Chapter 11A (commencing with
Section 11491) of Part 2 of Division 2 of the Insurance Code, or
nonprofit membership corporation lawfully operating under Section
9200 or Section 9201 of the Corporations Code, or a health care
service plan as defined under subdivision (f) of Section 1345 of the
Health and Safety Code, or a health maintenance organization approved
under Title XIII of the federal Public Health Services Act, that is
lawfully engaged in providing, arranging, paying for, or reimbursing
the cost of personal health services under insurance policies or
contracts, medical and hospital service agreements, membership
contracts, or the like, in consideration of premiums or other
periodic charges payable to it.
(d) "Health benefits plan" means any program or entity that
provides, arranges, pays for, or reimburses the cost of health
benefits.
(e) "Annuitant" means:
(1) Any person who has retired within 120 days of separation from
employment and who receives any retirement allowance under any state
or University of California retirement system to which the state was
a contributing party.
(2) A family member receiving an allowance as the survivor of an
annuitant who has retired as provided in paragraph (1), or as the
survivor of a deceased employee under Section 21541, 21546, or 21547
or similar provisions of any other state retirement system.
(3) Any employee who has retired under the retirement system
provided by a contracting agency as defined in paragraph (2) of
subdivision (g) and who receives a retirement allowance from that
retirement system, or a surviving family member who receives the
retirement allowance in place of the deceased.
(4) Any person who was a state member for 30 years or more and
who, at the time of retirement, was a local member employed by a
contracting agency.
(f) "Family member" means an employee's or annuitant's spouse and
any unmarried child (including an adopted child, a stepchild, or
recognized natural child who lives with the employee or annuitant in
a regular parent-child relationship). The board shall, by
regulation, prescribe age limits and other conditions and limitations
pertaining to unmarried children.
(g) "Contracting agency" means:
(1) Any contracting agency as defined in Section 20022, any county
or special district subject to the County Employees Retirement Law
of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3), and any special district, school district,
county board of education, personnel commission of a school district
or a county superintendent of schools.
(2) Any public body or agency of, or within California not covered
by the Public Employees' Retirement System or subject to the County
Employees Retirement Law of 1937 (Chapter 3 (commencing with Section
31450) of Part 3 of Division 4 of Title 3), that provides a
retirement system for its employees funded wholly or in part by
public funds.
(h) "Employer" means the state, any contracting agency employing
an employee, and any agency that has elected to become subject to
this part pursuant to Section 22856.
(i) "Special district" means a nonprofit, self-governed public
agency, within the State of California and comprised solely of public
employees, performing a governmental rather than proprietary
function.
SEC. 2. Section 25200 is added to the Education Code, to read:
25200. (a) On or before March 31, 2001, the Teachers' Retirement
Board shall estimate the amount needed, up to two billion dollars
($2,000,000,000), for allocation by the board for the actuarial cost
of providing health care benefits to retired members of the Defined
Benefit Program, as described in subdivision (b), for each month a
member is expected to be retired during the next 10 years, based on
the actuarial assumptions adopted by the board and used in the
actuarial analysis of the Defined Benefit Program as of June 30,
1999.
(b) Commencing July 1, 2001, the board shall credit each employer,
against the amount contributed pursuant to Section 22950, the amount
estimated pursuant to subdivision (a) for each retired member the
employer has certified, in a manner required by the board, is
enrolled in one or more of the following programs administered by the
employer:
(1) A catastrophic health care program for retired members who are
less than 65 years of age.
(2) A Medicare supplement health care program.
(3) A prescription drug program.
(c) The Teachers' Retirement Board shall establish by regulation
the services to be provided in a program specified in subdivision
(b). The required services shall be comparable to those generally
available to participants of comparable programs made available by
other public employers in California.
(d) The amount credited pursuant to subdivision (b) for each
retired member shall not exceed the employer's average costs of
health care benefits provided to retired members formerly employed by
the employer.
(e) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute that
is enacted before January 1, 2012, deletes or extends the dates on
which it becomes inoperative and is repealed.