HomeMy WebLinkAbout2001-01-09 - AGENDA REPORTS - ADJ EMPLYR CONTRB MED CARE ACT (2)CONSENT CALENDAR
DATE:
CITY OF SANTA CLARITA
AGENDA REPORT
January 9, 2001
City Manager Appro4by:Ken
Item to be presentedStriplin
SUBJECT: RESOLUTION ADJUSTING THE EMPLOYER'S CONTRIBUTION
UNDER THE PUBLIC EMPLOYEES MEDICAL & HOSPITAL CARE
ACT
DEPARTMENT: City Manager
RECOMMENDED ACTION
City Council adopt a resolution adjusting the employer's contribution under the Public
Employees Medical and Hospital Care Act for annuitants at an amount equal to employees, up
to $500 per month.
BACKGROUND
The City contracts with the California Public Employees' Retirement System (Ca1PERS) to
Provide health insurance for both active and retired employees. Under Government Code
Section 22857, the contracting agency, or the City, can provide an employer contribution toward
health insurance for employees and retirees at an equal amount or an unequal amount. If the
contracting agency elects to provide an unequal amount, the Code states that the agency must
increase the monthly amount by not less than 5 percent of the monthly employees contribution
until such time the employer contribution for retirees is equal to that of active employees.
When the City fust contracted with Ca1PERS, it elected the unequal amount option. As of this
year, the City's monthly contribution for retirees is $167.04.
In December 2000, the City Council authorized the implementation of a cafeteria style benefit
program for active employees. Under this plan, employees receive up to $500.00 per month to
spend on qualified benefits and deferred compensation. To better meet the needs of retirees
and address the issue of increased health insurance premiums, the City would like to amend
its contract with Ca1PERS and elect to provide retirees with an equal amount, or up to $500.00
per month. By this action, retirees would receive up to $500.00 per month to purchase health
insurance coverage. This is an increase of $332.96 per month. Based on the number of retirees
and the increasing cost of health premiums, staff feels it is appropriate to make the contract
adjustment at this time.
Adopted: 13 fwr rids Its: �J
FISCAL IMPACT
The City's contribution would increase from $167.04 per month to up to $500.00 per month, an
increase of $332.96 per month. Based on the number of retirees and the cost of medical
coverages selected the total cost is estimated to be approximately $15,000 per year.
ALTERNATIVE ACTIONS
1. City Council elect not to provide an equal amount for retirees.
2. Other options as determined by the City Council.
ATTACHMENT
Resolution