BILL ANALYSIS
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THIRD READING
Bill No: AB 2383
Author: Keeley (D)
Amended: 6/22/00 in Senate
Vote: 21
ASSEMBLY FLOOR : 78-0, 6/1/00 - See last page for vote
SUBJECT : Public employee benefits
SOURCE : California Public Employees Retirement System
(source)
DIGEST : This bill allows employees of local agencies
that contract with PERS who are employed part-time to
participate in the Public Employees' Medical and Hospital
Care Act.
Requires the Teachers' Retirement board to calculate the
actuarial cost of providing specified health benefits to
actual members of the defined benefit programs of the
Teachers' Retirement System as specified.
ANALYSIS : Existing law requires that employees work at
least half-time (50%) in order to be eligible for health
benefit coverage under PEMHCA.
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
CONTINUED
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healthcare coverage for their employees and retirees.
Specifically, this bill:
1.Allows employees of local agencies who contract with the
State Public Employees' Retirement System (CalPERS); and
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.
C. A prescription drug program.
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on July 1, 2011, and is repealed as of January 1, 2012,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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
PEMHCA coverage for part-time employees would be a
negotiable benefit paid through local employer and employee
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contributions.
The CalSTRS provisions in this bill 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.
ARGUMENTS IN SUPPORT : 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' Retirement System confer
with various stakeholders to resolve a number of policy and
technical issues."
ASSEMBLY FLOOR
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn,
Baldwin, Bates, Battin, Baugh, Bock, Brewer, Briggs,
Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett,
Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,
Firebaugh, Florez, Frusetta, Gallegos, Granlund, Havice,
Honda, House, Jackson, Kaloogian, Keeley, Knox, Kuehl,
Leach, Lempert, Leonard, Longville, Lowenthal, Machado,
Maddox, Maldonado, Margett, Mazzoni, McClintock, Migden,
Nakano, Olberg, Oller, Robert Pacheco, Rod Pacheco,
Papan, Pescetti, Reyes, Romero, Runner, Scott, Shelley,
Steinberg, Strickland, Strom-Martin, Thompson, Thomson,
Torlakson, Villaraigosa, Vincent, Washington, Wayne,
Wesson, Wiggins, Wildman, Wright, Zettel, Hertzberg
NOT VOTING: Floyd
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DLW:kb 6/27/00 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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