CC 2015-10-27_08c Resolution_Medical and Hospital Care ActMEMORANDUM
TO: CITY COUNCIL
FROM: DEBORAH MALICOAT, DIRECTOR OF ADMINISTRATIVE SERVICES~
BY: KAREN SISKO, HUMAN RESOURCES MANAGER ~
SUBJECT: CONSIDERATION OF A RESOLUTION FIXING THE EMPLOYER
CONTRIBUTION AT AN EQUAL AMOUNT FOR EMPLOYEES AND
ANNUITANTS UNDER THE PUBLIC EMPLOYEES' MEDICAL AND
HOSPITAL CARE ACT WITH RESPECT TO THE UNREPRESENTED
MEMBERS' GROUP
DATE: OCTOBER 27, 2015
RECOMMENDATION:
It is recommended the City Council adopt the attached resolution fixing the employer
contribution at an equal amount for employees and annuitants under the Public
Employees' Medical and Hospital Care Act ("PEMHCA") with respect to the
Unrepresented Members' Group (Group 005).
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
There is no financial impact since there are no employees in the Unrepresented
Members' Group (Group 005).
BACKGROUND:
In 2000, the City of Arroyo Grande established a contract under the Public Employees'
Medical and Hospital Care Act for health benefits for the employees. Six separate
groups were created under the contract to establish the City contribution amounts.
These groups included the Management Group, Services Employees International
Group -Local 620, Police Officers' Association, Firefighters' Association, Elected
Officials, and an Unrepresented Members' Group.
ANALYSIS OF ISSUES:
In 2007, the City established a Cafeteria plan for health benefits. Most of the above
plans were eventually modified to establish the City contribution at the PEMHCA
minimum which is a base amount required each month. The Unrepresented Members'
Group (Group 005) was not altered since there were no employees in this group. The
, City has been notified that the established contribution to this group has to be changed
since it is based on the rate of a health plan that will no longer be offered in 2016. It is
recommended that the City adopt the PEMHCA minimum for this group to be consistent
with the other groups in the ,City.
The Public Employees' Medical and Hospital Care Act allows you to terminate a group
contract during a sixty day window once health insurance rates are issued each year
Item 8.c. - Page 1
CITY COUNCIL
CONS ID ERA TION OF A RESOLUTION FIXING THE EMPLOYER CONTRIBUTION
AT AN EQUAL AMOUNT FOR EMPLOYEES AND ANNUITANTS UNDER THE
PUBLIC EMPLOYEES' MEDICAL AND HOSPITAL CARE ACT WITH RESPECT TO
THE UNREPRESENTED MEMBERS' GROUP
OCTOBER 27, 2015
PAGE2
(normally in June). Since the City does not utilize the Unrepresented Members' Group
(Group 005), it will most likely be recommended to the City Council next year that this
group be cancelled.
ADVANTAGES:
By making this change to the contribution for the Unrepresented Members' Group to the
PEMHCA minimum, the City will .be in compliance with PEMHCA requirements.
DISADVANTAGES:
There are no disadvantages to this change since there are no members in this group.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
Approve staff's recommendation by adopting the Resolution;
Modify as appropriate and approve staff's recommendation; or
Provide direction to staff.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, October 22, 2015. The
Agenda and report were posted on the City's website on Friday, October 23, 2015. No
public comments were received.
Item 8.c. - Page 2
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO
GRANDE FIXING THE EMPLOYER CONTRIBUTION AT AN EQUAL
AMOUNT UNDER THE PUBLIC EMPL YEES' MEDICAL AND
HOSPITAL CARE ACT WITH RESPECT TO THE UNREPRESENTED
MEMBERS' GROUP
WHEREAS, the City of Arroyo Grande ("City") is a contracting agency under
Government Code Section 22920 and subject to the Public Employees' Medical and
Hospital Care Act (the "Act") for participation by members of the Unrepresented
Members (Group 005); and
WHEREAS, Government Code Section 22892(a) provides that a contracting agency
subject to the Act shall fix the amount of the employer contribution by resolution; and
WHEREAS, Government Code Section 22892(b) provides that the employer
contribution shall be an equal amount for both employees and annuitants, but may not
be less than the amount prescribed by Section 22892(b) of the Act;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Arroyo
Grande that:
1. That the employer contribution for each employee or annuitant shall be the
amount necessary to pay the full cost of his/her enrollment, including the
enrollment of family members, in a health benefits plan or plans up to a
maximum of the PEMHCA Minimum per month, plus administrative fees and
Contingency Reserve fund assessments; and
2. The City of Arroyo Grande has fully complied with any and all applicable
provisions of Government Code Section 7507 in electing the benefits set forth
above; and
3. That the participation of the employees and annuitants of the City of Arroyo
Grande shall be subject to determination of its status as an "agency or
instrumentality of the state or political subdivision of a State" that is eligible to
participate in a governmental plan within the meaning of Section 414(d) of the
Internal Revenue Code, upon publication of final Regulations pursuant to such
Section. If it is determined that the City of Arroyo Grande would not qualify as an
agency or instrumentality of the state or political subdivision of a State under
such final Regulations, CalPERS may be obligated, and reserves the right to
terminate the health coverage of all participants of an employer; and
4. That the executive body appoint and direct the Director of Administrative
Services to file with the Board a verified copy of this resolution, and to perform on
behalf of the City of Arroyo Grande all functions required of it under the Act.
Item 8.c. - Page 3
RESOLUTION NO. -
PAGE2
On motion of Council Member seconded by Council Member
and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this day of '2015.
Item 8.c. - Page 4
RESOLUTION NO.
PAGE3
JIM HILL, MAYOR
ATTEST:
KITTY NORTON, DEPUTY CITY CLERK
APPROVED AS TO CONTENT:
DIANNE THOMPSON, CITY MANAGER
APPROVED AS TO FORM:
HEATHER WHITHAM, CITY ATTORNEY
Item 8.c. - Page 5
THIS PAGE INTENTIONALLY LEFT BLANK
Item 8.c. - Page 6