BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                          AB2383  (Keeley)
          
          Hearing Date:8/24/2000          Amended:8/14/2000
                                                                       
                   & as proposed to be amended                   
          Consultant: Maureen Brooks          Policy Vote:P. E. & R.   
          3-1                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY:   AB 2383 will allow employees of local  
          contracting agencies and school districts who work  less   
          than half time to participate in PEMHCA, at the option of  
          the employer.

          Additionally, AB 2383 requires the Teachers' Retirement  
          Board to develop three different plans to provide certain  
          health benefits to retired members and to report to the  
          Legislature by March 1, 2001.

                              Fiscal Impact (in thousands)
           Major Provisions           2000-01             2001-02              
           2002-03            Fund  
          STRS plans                $75                    STRF
          PERS admin costs                   
          -------------------unknown---------------    PERF

          Employer contribution    -unknown, potentially significant, local  
          option   Local
          STAFF COMMENTS:  SUSPENSE FILE. 
          
          The three plans STRS is required to do are as follows:  1)  
          a prescription drug insurance plan for all retired members,  
          2) a supplemental plan for members who have not yet  
          attained the age of Medicare eligibility, and 3) a plan to  
          encourage employers to provide health care benefits to  
          their retirees by crediting those employers against the  
          amount contributed for each retiree, as specified.  The  
          programs will include a catastrophic health care program  
          for retirees who are less than 65 years of age, a Medicare  
          supplement health care program, and a prescription drug  
          program.  The plans are to include an estimate of the costs  
          of implementation for each plan and draft statutory  
          language.











          Authors amendments delete the provision which would have  
          allowed STRS to become a contracting agency with CalPERS in  
          order for retirees of STRS to purchase PEMHCA coverage, and  
          provide STRS with more flexibility in developing the third  
          plan required above.

          Health benefits are provided to teachers on a  
          district-by-district basis, subject to collective  
          bargaining.  Only a few school districts offer health  
          insurance benefits to retired STRS members.  Some districts  
          make benefits available but only subsidize the premium  
          until the retiree reaches age 65 and become eligible for  
          Medicare coverage (although some members hired before 1986  
          were not required to participate in social security and are  
          consequently not eligible for Medicare.