DATE: 08/19/2026
TO: Honorable Mayor and City Council Members
FROM: Human Resources Department
2026-285
REQUEST FOR CITY COUNCIL ACTION
SUBJECT:
RESOLUTION ESTABLISHING MEDICAL GROUP 009-CORONA UTILITIES EMPLOYEES ASSOCIATION UNDER THE PUBLIC EMPLOYEES’ MEDICAL AND
HOSPITAL CARE ACT
EXECUTIVE SUMMARY:
This staff report asks the City Council to consider and approve the adoption of Resolution No. 2026-089, establishing Medical Group 009 – Corona Utilities Employee Association (CUEA) for employees currently enrolled in Medical Group 003 – Public Service Employees under the Public Employees' Medical and Hospital Care Act (PEMHCA). The creation of a separate medical group will align health benefit administration with the City's collective bargaining agreements and ensure that CUEA employees are administered under a distinct medical group that accurately reflects their recognized employee organization.
The proposed medical group will receive the PEMHCA minimum employer contribution, which will apply equally to both active employees and eligible annuitants, consistent with applicable provisions of the California Government Code and CalPERS health benefit regulations. Establishing Medical Group 009 provides administrative clarity, ensures compliance with PEMHCA requirements, and supports the City's continued administration of employee health benefits in accordance with negotiated labor agreements.
RECOMMENDED ACTION:
That the City Council adopt Resolution No. 2026-089, establishing Medical Group 009 – Corona Utilities Employee Association under the Public Employees' Medical and Hospital Care Act.
BACKGROUND & HISTORY:
The California Meyers-Milias-Brown Act (MMBA) requires the City to meet and confer in good faith with its recognized employee organizations regarding wages, hours, and other terms and conditions of employment. In September 2025, the Corona Utilities Employee Association (CUEA) was established as the recognized bargaining representative for certain certificated field employees in the Utilities Department who were previously represented by the Corona Public Service Employees Association (CPSEA). Following recognition, the City and CUEA negotiated the association's first Memorandum of Understanding (MOU), which was approved by the City Council on July 1, 2026, and established CUEA as a separate bargaining unit with its own negotiated wages and benefits.
The City of Corona participates in the Public Employees' Medical and Hospital Care Act (PEMHCA), administered by the California Public Employees' Retirement System (CalPERS), to provide health insurance benefits for eligible employees and retirees.
Under PEMHCA, participating employers establish medical groups that define employee populations eligible for specific employer health benefit contributions based on collective bargaining agreements, employee classifications, or other authorized distinctions.
Historically, employees represented by CUEA have participated in Medical Group 003 – Public Service Employees. With the establishment of CUEA as a separate recognized bargaining unit and the approval of its independent MOU, creating a distinct medical group is appropriate to ensure the administration of health benefits accurately reflects the City's current labor organization and negotiated benefit structure.
Creating Medical Group 009 will allow the City to administer CalPERS health benefits specifically for employees represented by CUEA while maintaining compliance with PEMHCA requirements. The new medical group will receive the statutory PEMHCA minimum
employer contribution, which will apply uniformly to eligible active employees and annuitants enrolled in the group. Establishing a separate medical group also provides administrative flexibility for future labor negotiations and supports accurate reporting and benefit administration through CalPERS.
The proposed action does not modify employee eligibility for CalPERS health benefits or alter the City's participation in PEMHCA. Rather, it reorganizes the administration of health benefits by creating a distinct medical group that corresponds to the City's recognized bargaining unit and negotiated labor agreement.
ANALYSIS:
The Public Employees' Medical and Hospital Care Act authorizes participating public agencies to establish separate medical groups for different classes of employees, bargaining units, and retirees, provided that employer contributions are administered in accordance with applicable provisions of the California Government Code and CalPERS regulations.
The establishment of Medical Group 009 – Corona Utilities Employee Association (CUEA) creates a distinct health benefit group for employees represented by CUEA who are currently enrolled in Medical Group 003 – Public Service Employees. This administrative change better aligns the City's health benefit structure with its recognized bargaining units while providing a clear framework for administering employer health contributions. A separate medical group does not expand employee eligibility for health benefits, increase negotiated benefit levels beyond those authorized by applicable labor agreements, or alter CalPERS eligibility requirements. Instead, it improves administrative efficiency, supports accurate benefit administration, and positions the City to effectively manage future labor agreement modifications involving CUEA.
Under the proposed resolution, the City will provide the PEMHCA minimum employer contribution for both active employees and eligible annuitants enrolled in Medical Group 009. Applying the minimum employer contribution equally to active employees and retirees ensures compliance with statutory requirements governing employer contributions under PEMHCA and provides consistency in benefit administration.
Pursuant to CalPERS administrative requirements, the new medical group will become effective on October 1, 2026, for employees currently enrolled in Medical Group 003 – Public Service Employees. This administrative effective date is established by CalPERS and does not change or interrupt the current health insurance coverage, eligibility, or benefits of CUEA employees. The resolution provides that the City will contribute the statutory PEMHCA minimum employer contribution toward health insurance premiums for both active employees and eligible annuitants enrolled in the new medical group, consistent with California Government Code Sections 22892 and 22893 and applicable CalPERS regulations.
City Council approval authorizes staff to submit all required documentation to CalPERS and take all administrative actions necessary to implement the new medical group.
Overall, the proposed action is consistent with the City's strategic objectives of maintaining effective employee benefits administration, ensuring compliance with applicable laws and regulations, and supporting sound fiscal and workforce management practices.
FINANCIAL IMPACT:
The establishment of Medical Group 009 does not create a new fiscal obligation beyond the City's existing commitment to provide employer health insurance contributions under PEMHCA. Employees currently enrolled in Medical Group 003 - Public Service Employees will be transferred administratively into the new medical group. The City will continue to provide the PEMHCA minimum employer contribution for eligible active employees and annuitants enrolled in Medical Group 009, consistent with applicable law and negotiated labor agreements.
Any future changes to employer health benefit contributions resulting from collective bargaining or statutory changes will be evaluated through the City's normal budget and labor negotiation processes.
ENVIRONMENTAL ANALYSIS:
This action is exempt pursuant to Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, known as the Common Sense Exemption, which provides that CEQA applies only to projects that have the potential to cause a significant effect on the environment. The establishment of Medical Group 009 – Corona Utilities Employee Association (CUEA) is an administrative action related solely to the City's employee health benefit program and has no potential to result in a direct or indirect physical change to the environment. Therefore, it can be seen with certainty that there is no possibility that the proposed action may have a significant effect on the environment, and no further environmental review is required.
PREPARED BY: MARCUS RIDLEY, DEPUTY CHIEF TALENT OFFICER REVIEWED BY: LORI SASSOON, CHIEF TALENT OFFICER
ATTACHMENTS:
1. Exhibit 1 – Resolution No. 2026-089