BILL ANALYSIS
AB 2383
Page 1
ASSEMBLY THIRD READING
AB 2383 (Keeley)
As Amended May 26, 2000
Majority vote
PUBLIC EMPLOYEES 7-0 APPROPRIATIONS 21-0
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|Ayes:|Correa, Pescetti, Briggs, |Ayes:|Migden, Campbell, |
| |Dutra, Firebaugh, Honda, | |Ackerman, Alquist, |
| |Knox | |Aroner, Ashburn, Brewer, |
| | | |Cedillo, Corbett, Davis, |
| | | |Kuehl, Maldonado, Papan, |
| | | |Romero, Runner, Shelley, |
| | | |Thomson, Wesson, Wiggins, |
| | | |Wright, Zettel |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Makes various changes with regard to public employee
health benefits. Specifically, this bill :
1)Allows employees of local agencies that contract with the
Public Employees' Retirement System (CalPERS) who are employed
less than half time to participate in the Public Employees'
Medical and Hospital Care Act (PEMHCA).
2) Requires that the Teachers' Retirement Board (TRB), on or
before March 31, 2001, estimate, as specified, the amount
needed (up to $2 billion) to provide specified health care
benefits to retired members of the State Teachers' Retirement
System's (CalSTRS) defined benefit plan.
3) Specifies that beginning July 1, 2001, a CalSTRS employer
will be credited by TRB with the amount estimated for each
retired member the employer certifies is enrolled in one or
more of the following:
a) A catastrophic health care program for retired members
who are less than 65 years old;
b) A Medicare supplement health care program; and,
c) A prescription drug program.
AB 2383
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4)Authorizes TRB to establish regulations to administer the
program.
5)Specifies that the amount credited to each CalSTRS employer
cannot exceed the employer's average health care costs.
6)Specifies that the CalSTRS provisions become inoperative on
July 1, 2011, and is repealed as of January 1, 2012, unless
extended by subsequent legislation.
EXISTING LAW requires that employees work at least half time
(50%) in order to be eligible for health benefits coverage under
PEMHCA.
FISCAL EFFECT : PEMHCA coverage for part-time employees would be
a negotiable benefit paid through local employer and employee
contributions.
The CalSTRS provisions in this bill would increase the present
value costs to the Teachers' Retirement Fund by $2 billion. All
costs would be paid out of CalSTRS surplus and would not affect
employer or employee contribution rates.
COMMENTS : CalPERS is responsible for administering PEMHCA
which provides health benefits for over one million employees,
retirees, and dependents. According to CalPERS, however,
current PEMHCA eligibility requirements pose a barrier for some
otherwise qualified employers to obtain affordable healthcare
coverage for their employees and retirees.
Supporters point out that, "While school district employees
comprise the largest percentage of the CalPERS eligible groups,
they make up the smallest percentage enrolling in PEMHCA.
Currently, just over 100 of more than 1,100 school districts are
enrolled in PEMHCA. One reason for the low school district
participation is that PEMHCA does not cover less than half time
employees, limiting the ability of school districts to provide
coverage for all employees."
Supporters also state that additional amendments will be added
to this bill that will hopefully increase participation in the
program. According to the author, "AB 2383 seeks to provide
greater flexibility in PEMHCA enrollment eligibility for
employers, employees, retirees, and dependents. This bill
remains a work in progress while CalPERS and the State Teachers'
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Retirement System confer with various stakeholders to resolve a
number of policy and technical issues."
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0005007