TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Travis Sais, Interim Human Resources and Risk Manager
SUBJECT: Consideration and possible action to adopt 1) Resolution No. 23-35 – A Resolution fixing the employer contribution at an equal amount for employees and annuitants under the Public Employees’ Medical and Hospital Care Act (Government Code § 22892); and
2) Resolution No. 23-36 – A Resolution fixing the Employer Contribution under the Public Employees’ Medical and Hospital Care Act (Government Code § 22893).
DATE: August 28, 2023
EXECUTIVE SUMMARY
Following labor negotiations, the City Council approved an increase to the maximum contribution paid by the City to its employees’ medical benefit plans. This increase is set to be effective on January 1, 2024. These two resolutions are required by CalPERS to implement this increase for both the vesting and non-vesting groups of employees.
RECOMMENDATION TO CITY COUNCIL
1) Adopt Resolutions Nos. 23-35 and 23-36; or
2) Alternatively, discuss and take other action related to these items.
FISCAL IMPACT
The cost of increasing the medical insurance premium cap is approximately $41,400 for fiscal year 2023-24. This amount also includes the increase from medical opt-out earnings and taxes.
BACKGROUND
The City offers medical coverage through CalPERS for all full-time employees. The City pays up to the maximum contribution for each employee. The maximum contribution for 2023 is $1,625 per month. During the City’s most recent labor negotiations, the City Council agreed to increase the maximum contribution amount from $1,625 per month to $1,800 per month for both vesting and non-vesting employees, effective January 1, 2024.
In order to amend the City’s existing agreement with CalPERS to reflect this increase,
14-K
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Staff Report – CalPERS Medical Contribution
August 28, 2023
BACKGROUND – Continued
CalPERS regulations require the City Council to pass and submit two resolutions (attached). The first resolution changes the contribution for all active employees, while the second resolution changes the contribution for retirees hired after the implementation of the retiree medical vesting schedule in 2004.
ATTACHMENTS:
Resolution No. 23-35....................................................................................................... 3 Resolution No. 23-36....................................................................................................... 5
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CITY OF BELLFLOWER
RESOLUTION NO. 23-35
A RESOLUTION FIXING THE EMPLOYER CONTRIBUTION AT
AN EQUAL AMOUNT FOR EMPLOYEES AND ANNUITANTS
UNDER THE PUBLIC EMPLOYEES’ MEDICAL AND HOSPITAL
CARE ACT (GOVERNMENT CODE § 22982)
THE CITY COUNCIL DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds:
A. The City of Bellflower is a contracting agency under Government Code § 22920 and subject to the Public Employees’ Medical and Hospital Care Act (the “Act”);
B. Government Code § 22892(a) provides that a contracting agency subject to the Act must fix the amount of the employer contribution by resolution; and
C. Government Code § 22892(b) provides that the employer contribution must be an equal amount for both employees and annuitants, but may not be less than the amount prescribed by § 22892(b) of the Act.
SECTION 2. The employer contribution for each employee or annuitant is the amount necessary to pay the full cost of his/her enrollment, including the enrollment of family members, in a health benefits plan up, to a maximum of $1,800.00 per month effective January 1, 2024, plus administrative fees and Contingency Reserve Fund assessments.
SECTION 3. The City of Bellflower has fully complied with any and all applicable provisions of Government Code § 7507 in electing the benefits set forth above.
SECTION 4. The participation of the employees and annuitants of t he City of Bellflower are 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 Internal Revenue Code § 414(d), upon publication of final Regulations pursuant to such Section. If it is determined that the City of Bellflower would not qualify as an agency or instrumentality of the state or political subdivision of a State under such final Regulations, California Public Employees’ Retirement System may be obligated, and reserves the right to terminate the health coverage of all participants of the employer.
SECTION 5. The City Council appoints and directs, and does hereby appoint and direct, the City Manager to file with the Board a verified copy of this resolution, and to perform on behalf of the City of Bellflower all functions required of it under the Act.
SECTION 6. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature .
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City of Bellflower
Resolution No. 23-35
SECTION 7. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is di rected to attest thereto.
SECTION 8. This Resolution will become effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 28TH DAY OF AUGUST 2023.
__________________________________
Sonny R. Santa Ines, Mayor
ATTEST:
_________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
_________________________________
Karl H. Berger, City Attorney
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CITY OF BELLFLOWER
RESOLUTION NO. 23-36
A RESOLUTION FIXING THE EMPLOYER CONTRIBUTION
UNDER THE PUBLIC EMPLOYEES’ MEDICAL AND
HOSPITAL CARE ACT (GOVERNMENT CODE § 22893)
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds:
A. The City of Bellflower is a contracting agency under Government Code § 22920 and subject to the Public Employees’ Medical and Hospital Care Act (the “Act”); and
B. The City of Bellflower has filed a resolution with the Board of the California Public Employees’ Retirement System to provide a postretirement health benefits vesting requirement to employees who retire for service in accordance with Government Code § 22893.
SECTION 2. The employer contribution for each annuitant subject to vesting is the amount necessary to pay the cost of his/her enrollment, including the enrollment of family members, in a health benefits plan up to a maximum of $1,800.00 per month effective January 1, 2024, but not less than the amounts prescribed by Government Code § 22893(a)(1), plus administrative fees and Contingency Reserve Fund Assessments.
SECTION 3. The City of Bellflower has fully complied with any and all applicable provisions of Government Code § 7507 in electing the benefits set forth above.
SECTION 4. The participation of the employees and annuitants of the City of Bellflower are 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 Internal Revenue Code § 414(d), upon publication of final Regulations pursuant to such Section. If it is determined that the City of Bellflower would not qualify as an agency or instrumentality of the state or political subdivision of a State under such final Regulations, the California Public Employees’ Retirement System may be obligated, and reserves the right to terminate the health coverage of all participants of the employer.
SECTION 5. That the City Council appoint and direct, and it does hereby appoint and direct, the City Manager to file with the Board a verified copy of this resolution, and to perform on behalf of the City of Bellflower all functions required of it under the Act.
SECTION 6. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
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City of Bellflower
Resolution No. 23-36
SECTION 7. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
SECTION 8. This Resolution will become effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 28TH DAY OF AUGUST 2023.
__________________________________
Sonny R. Santa Ines, Mayor
ATTEST:
_________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
_________________________________
Karl H. Berger, City Attorney
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