BILL ANALYSIS
AB 2383
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Date of Hearing: May 10, 2000
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
AB 2383 (Keeley) - As Amended: April 6, 2000
Policy Committee:
P.E.R.&S.S.Vote:7-0
Urgency: No State Mandated Local
Program:NoReimbursable:
SUMMARY :
This bill allows part-time employees of local agencies and
school employers contracting with the California Public
Employees' Retirement System (CalPERS) to receive health
benefits through the Public Employees' Medical and Hospital Care
Act (PEMCHA).
FISCAL EFFECT :
PEMCHA coverage for part-time employees would be a negotiable
benefit paid through local employer and employee contributions.
Given that more than 1100 local agencies and school employers
contract with CalPERS, employer contribution costs of providing
PEMCHA coverage to part-time employees are likely to be several
million dollars annually.
COMMENTS :
1)Background. Currently, there is no statewide health benefit
program for CalSTRS members, unlike CalPERS members, who are
covered by PEMCHA. Health benefits are provided for teachers
on a district-by-district basis, subject to collective
bargaining. (However, school employers contract with CalPERS
for retirement and health benefits for their classified
employees; i.e., nonteaching maintenance, food service and
administrative workers). Only a few school districts offer
vested health insurance benefits to retired CalSTRS members.
Some districts make benefits available, but only subsidize the
premium until the retiree reaches age 65 and becomes eligible
for Medicare coverage. Some CalSTRS members were hired before
Social Security coverage became mandatory in 1986 and are not
AB 2383
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eligible for Medicare coverage. To address the gaps in
health coverage for CalSTRS members, CalPERS and CalSTRS
convened a Health Benefits Task Force. This bill is a product
of the Task Force.
1)A Work in Progress. The provision contained in this bill -
making part-time employees of contracting local agencies
eligible for PEMCHA coverage - is noncontroversial and was
agreed to by all members of the Task Force. There is
agreement among task force members on two other areas:
a) Allowing family members of deceased CalSTRS members to
receive PEMCHA benefits, even though the family is not
receiving survivor benefits.
b) Establishing CalSTRS as the contracting entity for the
purposes of enrolling Medicare-eligible CalSTRS retirees in
PEMCHA.
CalPERS legal staff expect these amendments to be completed by
June.
1)Expanding School District PEMCHA Participation . The most
difficult question faced by the Task Force is how to entice
more school districts into voluntarily providing PEMCHA
coverage to their active and retired employees. School
districts may contract with CalPERS for PEMCHA coverage under
current law, but most do not have a financial incentive to do
so. CalPERS requires contracting agencies to provide equal
employer contributions for active and retired members. But
since most school districts do not subsidize full medical
benefit for their retirees, PEMCHA participation would result
in added expense. The Task Force is exploring the concept of
allowing school districts to contract for a reduced level of
retiree benefits, but employee organizations are reluctant to
endorse the concept of a "two-tiered" PEMCHA.
1) Analysis Prepared by : Stephen Shea / APPR. / (916) 319-2081