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AB-2696 Public Employees’ Retirement System: limited term appointments.(2017-2018)

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Date Published: 06/15/2018 04:00 AM
AB2696:v98#DOCUMENT

Amended  IN  Senate  June 14, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2696


Introduced by Assembly Member Rodriguez

February 15, 2018


An act to amend Section 22850 20480 of the Government Code, relating to public employee benefits. retirement, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 2696, as amended, Rodriguez. Public Employees’ Medical and Hospital Care Act: benefit plans. Public Employees’ Retirement System: limited term appointments.
The Public Employees’ Retirement Law (PERL) establishes the Public Employees’ Retirement System (PERS), which provides a defined benefit to members of the system, based on final compensation, credited service, and age at retirement, subject to certain variations. PERL authorizes a public agency and a school employer to contract to make their employees members of PERS. PERL establishes the compensation earnable by members of the system, defined as the member’s payrate and special compensation, including out-of-class pay. Existing law requires fees and other amounts received by the Board of Administration of PERS pursuant to PERL to be credited to the Public Employees’ Retirement Fund, a continuously appropriated fund.
PERL prohibits an out-of-class appointment by a contracting agency employer or a school employer from exceeding 960 hours in each fiscal year. PERL requires an employer who violates this provision to pay penalties to the system based on, among other factors, an amount of money equal to 3 times the employee and employer contributions that would otherwise be paid to the system for the difference between the compensation paid for an out-of-class appointment and the compensation paid and reported to the system for the member’s permanent position, for the entire period or periods the member serves in an out-of-class appointment.
This bill would instead require that the amount of money for this penalty equal 3 times the employee and employer contributions that otherwise would have been paid and reported to the system for the difference between the compensation paid for the out-of-class appointment and the compensation that would have been paid and reported to the system, but for the vacancy, for the position in accordance with a publicly available pay schedule applicable to the vacant position, for the entire period or periods the member serves in an out-of-class appointment. By increasing the amount of moneys deposited in a continuously appropriated fund, this bill would make an appropriation.

The Public Employees’ Medical and Hospital Care Act, which is administered by the Board of Administration of the Public Employees’ Retirement System, governs the funding and provision of postemployment health care benefits for eligible retired public employees and their beneficiaries. Existing law requires the board to approve an employee association health benefit plan previously approved by the board in the 1987–88 contract year or prior, if the plan continues to meet the minimum standards prescribed by the board. Existing law authorizes the California Correctional Peace Officer Association Health Benefits Trust to offer different health benefit plan designs with varying premiums in different areas of the state.

This bill would require the board to approve an employee association health benefit plan offered by the California Association of Highway Patrolmen Health Benefits Trust, the Peace Officers Research Association of California Health Benefits Trust, or the California Correctional Peace Officer Association Health Benefits Trust if the plan meets minimum standards prescribed by the board. The bill would authorize the trustees of these organizations to offer one or more health benefit plans approved by the board on a regional basis with a regional premium subject to specified limitations.

Vote: MAJORITY   Appropriation: NOYES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 20480 of the Government Code is amended to read:

20480.
 (a) An out-of-class appointment by a contracting agency employer or a school employer shall not exceed a total of 960 hours in each fiscal year.
(b) A contracting agency employer or school employer shall track the hours worked by an employee serving in an out-of-class appointment and report that service to the system no later than 30 days following the end of each fiscal year.
(c) The compensation for an appointment described in subdivision (a) shall be pursuant to a collective bargaining agreement or a publicly available pay schedule.
(d) (1) An employer who violates this section shall pay penalties to the system according to the following:
(A) An amount of money equal to three times the employee and employer contributions that would otherwise be paid to the system for the difference between the compensation paid for an appointment described in subdivision (a) and the compensation that would have been paid and reported to the system for the member’s permanent position, system, but for the vacancy, for the position in accordance with a publicly available pay schedule applicable to the vacant position, for the entire period or periods the member serves in an out-of-class appointment.
(B) Reimbursement for administrative expenses incurred in responding to this situation.
(2) Penalties paid to the system pursuant to this subdivision are not normal contributions or additional contributions that would stand to the credit of a member’s individual account.
(e) The member shall bear no liability, obligations, or expense as a result of the unlawful actions of the employer with respect to this section.
(f) For purposes of this section, “out-of-class appointment” means an appointment of an employee to an upgraded position or higher classification by the employer or governing board or body in a vacant position for a limited duration.
(g) For purposes of this section, “vacant position” refers to a position that is vacant during recruitment for a permanent appointment. “Vacant position” does not refer to a position that is temporarily available due to another employee’s leave of absence.

SECTION 1.Section 22850 of the Government Code is amended to read:
22850.

(a)The board may, without compliance with any provision of law relating to competitive bidding, enter into contracts with carriers offering health benefit plans or with entities offering services relating to the administration of health benefit plans.

(b)The board may contract with carriers for health benefit plans or approve health benefit plans offered by employee organizations, provided that the carriers have operated successfully in the hospital and medical care fields prior to the contracting for or approval thereof. The plans may include hospital benefits, surgical benefits, inpatient medical benefits, outpatient benefits, obstetrical benefits, and benefits offered by a bona fide church, sect, denomination, or organization whose principles include healing entirely by prayer or spiritual means.

(c)Notwithstanding any other provision of this part, the board may contract with health benefit plans offering unique or specialized health services.

(d)The board may administer self-funded or minimum premium health benefit plans.

(e)The board may contract for or implement employee cost containment and cost reduction incentive programs that involve the employee, the annuitant, and family members as active participants, along with the carrier and the provider, in a joint effort toward containing and reducing the cost of providing medical and hospital health care services to public employees. In developing these plans, the board, in cooperation with the Department of Human Resources, may request proposals from carriers and certified public employee representatives.

(f)Notwithstanding any other provision of this part, the board may do any of the following:

(1)Contract for, or approve, health benefit plans that charge a contracting agency and its employees and annuitants rates based on regional variations in the costs of health care services.

(2)Contract for, or approve, health benefit plans exclusively for the employees and annuitants of contracting agencies. State employees and annuitants may not enroll in these plans. The board may provide health benefit plans exclusively for employees and annuitants of contracting agencies in addition to or in lieu of other health benefit plans offered under this part pursuant to Section 22922.

(3)Implement and administer risk adjustment procedures consistent with Section 22864 that require health benefit plans to adjust premiums and authorize the system to redistribute premiums based on rules and regulations established by the board for this purpose.

(g)The board shall approve any employee association health benefit plan offered by the California Association of Highway Patrolmen Health Benefits Trust, the Peace Officers Research Association of California Health Benefits Trust, or the California Correctional Peace Officer Association Health Benefits Trust, provided that the plan meets the minimum standards prescribed by the board. The trustees of an employee association health benefit plan are responsible for providing health benefit plan administration and services to its enrollees. Notwithstanding any other provision of this part, the trustees of an employee association health benefit plan authorized under this subdivision may offer one or more health benefit plans that have been approved by the board on a regional basis with a regional premium. The trustees of these employee association health benefit plans shall not use geographic regions that are different from the geographic regions established by the board for contracting agency regional premiums, as authorized under paragraph (1) of subdivision (f), except that the trustees may use a north and south geographic region of the state different from the regions established by the board.

(h)Irrespective of any other provision of law, the sponsors of a health benefit plan approved under this section may reinsure the operation of the plan with an admitted insurer authorized to write disability insurance, if the premium includes the entire prepayment fee.