BILL NUMBER: AB 2608 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Chesbro
FEBRUARY 19, 2010
An act to amend Section 22877 of the Government Code, relating to
the Rural Health Care Equity Program.
LEGISLATIVE COUNSEL'S DIGEST
AB 2608, as introduced, Chesbro. Rural Health Care Equity Program.
Existing law establishes, until July 3, 2010, or earlier, upon a
specified finding, the Rural Health Care Equity Program for the
purpose of funding the subsidization and reimbursement of premium
costs, deductibles, coinsurance, and other out-of-pocket health care
expenses paid by employees of State Bargaining Unit 5 living in rural
areas, as defined. Prior to July 1, 2009, the program was open to
all employees living in rural areas. Existing law provides that
moneys remaining in the account of the program on July 1, 2009, other
than moneys attributable to State Bargaining Unit 5, are to be
deposited in the General Fund. Existing law requires that moneys
remaining in a program account upon its termination be deposited in
the General Fund.
The bill would extend the Rural Health Care Equity Program until
January 1, 2012, or to an earlier date upon a specified finding, and
would extend the benefits to all employees and annuitants living in
rural areas. This bill would delete the provision regarding the
disposition of any moneys remaining in a program account on the date
the program is terminated.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22877 of the Government Code is amended to
read:
22877. (a) As used in this section, the following definitions
shall apply:
(1) "Coinsurance" means the provision of a health benefit plan
design that requires the health benefit plan and state employee
or annuitant to share the cost of hospital or medical expenses
at a specified ratio.
(2) "Deductible" means the annual amount of out-of-pocket medical
expenses that a state employee or annuitant must pay
before the health benefit plan begins paying for expenses.
(3) "Program" means the Rural Health Care Equity Program.
(4) "Rural area" means an area in which there is no board-approved
health maintenance organization plan available for enrollment by
state employees or annuitants residing in the area.
(b) (1) The Rural Health Care Equity Program is hereby established
for the purpose of funding the subsidization and reimbursement of
premium costs, deductibles, coinsurance, and other out-of-pocket
health care expenses paid by eligible employees and annuitants
living in rural areas that would otherwise be covered if the
state employee or annuitant was enrolled in a
board-approved health maintenance organization plan. The program
shall be administered by the Department of Personnel Administration
or by a third-party administrator approved by the Department of
Personnel Administration in a manner consistent with all applicable
state and federal laws. The board shall determine the rural area for
each subsequent fiscal year, at the same time that premiums for
health maintenance organization plans are approved.
(2) Separate accounts shall be maintained within the program for
all of the following:
(A) Employees, as defined in subdivision (c) of Section 3513.
(B) Excluded employees, as defined in subdivision (b) of Section
3527.
(C) State annuitants.
(c) Moneys in the program shall be allocated to the respective
accounts as follows:
(1) The contribution provided by the state with respect to each
employee, as defined in subdivision (c) of Section 3513, who lives in
a rural area and is otherwise eligible, shall be an amount
determined through the collective bargaining process.
(2) The contribution provided by the state with respect to each
excluded employee, as defined in subdivision (b) of Section 3527, who
lives in a rural area and is otherwise eligible, shall be an amount
equal to, but not to exceed, the amount contributed pursuant to
paragraph (1).
(3) The contribution provided by the state with respect to each
state annuitant who lives in a rural area, is not a Medicare
participant, resides in California, and is otherwise eligible, shall
be an amount not to exceed five hundred dollars ($500).
(4) The contribution provided by the state with respect to each
annuitant who lives in a rural area, resides in California,
participates in a supplemental Medicare health benefit plan, and is
otherwise eligible, shall be an amount equal to the Medicare Part B
premiums incurred by the annuitant, not to exceed seventy-five
dollars ($75) per month. The program may not reimburse for penalty
amounts.
(3)
(5 ) If an eligible employee enters or
leaves service with the state during a fiscal year, contributions for
the employee shall be made on a pro rata basis. A similar
computation shall be used for anyone entering or leaving the
bargaining unit, including a person who enters State Bargaining Unit
5 by promotion during a fiscal year.
(d) Each fund of the State Treasury, other than the General Fund,
shall reimburse the General Fund for any sums allocated pursuant to
subdivision (c) for employees whose compensation is paid from that
fund. That reimbursement shall be accomplished using the following
methodology:
(1) On or before December 1 of each year, the Department of
Personnel Administration shall provide a list of active state
employees who participated in the program during the previous fiscal
year to each employing department.
(2) On or before January 15 of each year, each department that
employed an active state employee identified by the Department of
Personnel Administration as a participant in the program shall
provide the Department of Personnel Administration with a list of the
funds used to pay each employee's salary, along with the proportion
of each employee's salary attributable to each fund.
(3) Using the information provided by the employing departments,
the Department of Personnel Administration shall compile a list of
program payments attributable to each fund. On or before February 15
of each year, the Department of Personnel Administration shall
transmit this list to the Department of Finance.
(4) The Department of Finance shall certify to the Controller the
amount to be transferred from the unencumbered balance of each fund
to the General Fund.
(5) The Controller shall transfer to the General Fund from the
unencumbered balance of each impacted fund the amount specified by
the Department of Finance.
(6) To ensure the equitable allocation of costs, the Director of
the Department of Personnel Administration or the Director of Finance
may require an audit of departmental reports.
(e) For any sums allocated pursuant to subdivision (c) for
annuitants, funds, other than the General Fund, shall be charged a
fair share of the contribution provided by the state in accordance
with the provisions of Article 2 (commencing with Section 11270) of
Chapter 3 of Part 1 of Division 3. On or before July 31 of each year,
the Department of Personnel Administration shall provide the
Department of Finance with the total costs allocated for annuitants
in the previous fiscal year. The reported costs may not include
expenses that have been incurred but not claimed as of July 31.
(f) Notwithstanding any other provision of law and subject to the
availability of funds, moneys within the program shall be disbursed
for the benefit of eligible annuitants. The disbursements shall
either reimburse the annuitant, if not a Medicare participant, for
some or all of the deductible incurred by the annuitant or a family
member, not to exceed five hundred dollars ($500) per fiscal year, or
reimburse the annuitant, if a Medicare participant, for Medicare
Part B premiums incurred by the annuitant, not to exceed seventy-five
dollars ($75) per month. The program may not reimburse for penalty
amounts. These reimbursements shall be provided by the Department of
Personnel Administration. Notwithstanding any other provision of law,
any annuitant who cannot be located within a period of three months
and whose disbursement is returned to the Controller as unclaimed is
ineligible to participate in the program.
(e)
(g) Notwithstanding any other law and subject to the
availability of funds, moneys within the program shall be disbursed
for the benefit of eligible employees. The disbursements shall
subsidize the preferred provider plan premiums for the employee by an
amount equal to the difference between the weighted average of
board-approved health maintenance organization premiums and the
lowest board-approved preferred provider plan premium available under
this part, and reimburse the employee for a portion or all of his or
her incurred deductible, coinsurance, and other out-of-pocket
health-related expenses that would otherwise be covered if the
employee and his or her family members were enrolled in a
board-approved health maintenance organization plan. These subsidies
and reimbursements shall be provided as determined by the Department
of Personnel Administration, which may include, but is not limited
to, a supplemental insurance plan, a medical reimbursement account,
or a medical spending account plan.
(f)
(h ) Subject to subdivision (h)
(j) , moneys remaining in an account of the
program at the end of any fiscal year shall remain in the account for
use in subsequent fiscal years, until the account is terminated.
Moneys remaining in a program account upon termination, after payment
of all expenses and claims incurred prior to the date of
termination, shall be deposited in the General Fund.
(g)
(i) The Legislature finds and declares that the program
shall be operated for the exclusive benefit of State
employees of State Bargaining Unit 5 ,
annuitants, and family members .
(h)
(j) This section shall be operative only to the extent
that funding is provided in the annual Budget Act or another statute
and solely for the benefit of employees of State Bargaining
Unit 5 .
(i)
(k) This section shall cease to be operative on
July 3, 2010 January 1, 2012 , or on an
earlier date if the board makes a formal determination that health
maintenance organization plans are no longer the most cost-effective
health benefit plans offered by the board.
(j) Notwithstanding any other law, on and after July 1, 2009, the
benefits of the Rural Health Care Equity Program shall be available
only to employees in State Bargaining Unit 5, and shall not be
available to any other employees. Pursuant to subdivision (f), any
moneys that remain in the accounts of the program on July 1, 2009,
other than moneys attributable to employees in State Bargaining Unit
5 on that date, shall be deposited in the General Fund. Benefits of
the Rural Health Care Equity Program shall cease to be available to
employees in State Bargaining Unit 5, on and after July 3, 2010, and
any moneys remaining in the accounts of the program shall be
deposited in the General Fund.