SR-602-004
f:\person:misc/council/staffrpt/council45 Santa Monica, California
Council Meeting: April 24, 2001
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Adopt Resolution Electing to be Subject to Public
Employees? Medical and Hospital Care Act Only With Respect to the City?s
Local Miscellaneous Members Category and Fixing the Employer?s
Contribution for Employees and the Employer?s Contribution for
Annuitants at Different Amounts
INTRODUCTION
This report recommends that the City Council adopt the attached Resolution electing to
be subject to the Public Employees? Medical and Hospital Care Act with respect to City
employees in the local miscellaneous members category. The attached resolution
complies with the procedure required by CalPERS.
BACKGROUND
The City currently offers medical insurance plans which are underwritten by CIGNA and
Kaiser to its non-safety employees. Due to unanticipated medical insurance premium
increases for the 2001 medical plan year, the City?s Health Insurance Committee,
comprised of representatives from all of the City?s non-safety bargaining units, met for
the purpose of exploring other medical insurance plan options in an effort to control the
escalating cost of medical insurance for non-safety employees.
DISCUSSION
The Health Insurance Committee conducted a thorough review of the various medical
insurance options. This review included input from two consultants, one representing
the bargaining units and one representing the City.
Based on their review, the Health Insurance Committee is recommending that the City
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contract with the California Public Employees? Retirement System (CalPERS) to offer
the CalPERS HealthCare program to all non-safety employees. The Health Insurance
Committee is also recommending that the City?s contribution for annuitants (retirees) be
set at the lowest rate allowed by CalPERS.
In order to offer the CalPERS HealthCare program, the City must adopt a resolution
specifically electing to be covered by the Public Employees? Medical and Hospital Care
Act. It is intended that the CalPERS health program become available to City
employees in the local miscellaneous members category effective July 1, 2001.
BUDGET/FINANCIAL IMPACT
Sufficient funds will be included in the FY2001-2002 budget to cover the costs
associated with this change.
RECOMMENDATION
It is recommended that the City Council adopt the attached resolution electing to be
subject to the Public Employees? Medical and Hospital Care Act with regard to City
employees in the local miscellaneous members category.
Prepared By: Karen Bancroft
RESOLUTION NUMBER _______ (CCS)
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(CITY COUNCIL SERIES)
A RESOLUTION ELECTING TO BE SUBJECT TO
PUBLIC EMPLOYEES? MEDICAL AND HOSPITAL CARE ACT ONLY WITH RESPECT
TO THE LOCAL MISCELLANEOUS MEMBERS CATEGORY
AND
FIXING THE EMPLOYER?S CONTRIBUTION FOR EMPLOYEES AND THE
EMPLOYER?S CONTRIBUTION FOR ANNUITANTS AT DIFFERENT AMOUNTS
WHEREAS, Government Code Section 22850.3 provides that a contracting
agency may elect upon proper application to participate under the Public Employees?
Medical and Hospital Care Act with respect to a recognized employee organization only;
and
WHEREAS, Government Code Section 22857 provides that a contracting agency
may fix the amount of the employer?s contribution for employees and the employer?s
contribution for annuitants at different amounts provided that the monthly contribution
for annuitants shall be annually increased by an amount not less than 5 percent of the
monthly contribution for employees, until such time as the amounts are equal; and
WHEREAS, the City of Santa Monica, hereinafter referred to as Public Agency is
a local agency contracting with the Public Employees? Retirement System; and
WHEREAS, the Public Agency desires to obtain for members of the local
miscellaneous members category, who are employees and annuitants of the agency,
the benefit of the Act and to accept the liabilities and obligations of an employer under
the Act and Regulations;
NOW, THEREFORE, BE IT RESOLVED that the Public Agency elect, and it
does hereby elect, to be subject to the provisions of the Act; and
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BE IT FURTHER RESOLVED that the employer?s contribution for each employee
shall be the amount necessary to pay the full cost of his enrollment, including the
enrollment of his family members in a health benefits plan up to a maximum of $16.00
per month; and
BE IT FURTHER RESOLVED that the employer?s contribution for each annuitant
shall be the amount necessary to pay the cost of his enrollment, including the
enrollment of his family members, in a health benefits plan up to a maximum of $1.00
per month; and
BE IT FURTHER RESOLVED that the employer?s contribution for each annuitant
shall be increased annually by five (5) percent of the monthly contribution for
employees, until such time as the contributions are equal; and that the contributions for
employees and annuitants shall be in addition to those amounts contributed by the
Public Agency for administrative fees and to the Contingency Reserve Fund; and
BE IT FURTHER RESOLVED that the executive body appoint and direct, and it
does hereby appoint and direct, the Director of Personnel to file with the Board of
Administration of the Public Employees? Retirement System a verified copy of this
Resolution, and to perform on behalf of said Public Agency all functions required of it
under the Act and Regulations of the Board of Administration; and
BE IT FURTHER RESOLVED that coverage under the Act be effective on
July 1, 2001.
The City Clerk shall certify to the adoption of this Resolution, and thenceforth and
thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
__________________________
MARSHA JONES MOUTRIE
City Attorney
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