DATE: October 15, 2024
TO: Mayor and City Council
FROM: Director of Human Resources
SUBJECT Adopt a Resolution Establishing the City Contribution for Active and Retiree Medical Premiums Set by the California Public Employee Retirement System (CalPERS) for Calendar Year 2025 pursuant to California Government Code Section 22892 of the Public Employees’ Medical and Hospital Care Act
RECOMMENDATION
That the City Council adopts a Resolution (Attachment II) authorizing the implementation of the mandatory minimum employer contributions to active and retiree medical premiums for calendar year 2025.
SUMMARY
The minimum employer contribution to the medical premiums of active and retired employees has increased to $158.00 for calendar year 2025. This contribution amount is adjusted annually by CalPERS. The City’s current contribution exceeds this amount.
BACKGROUND/DISCUSSION
The City contracts with CalPERS to provide quality health benefits to its active and retired employees. California Government Code Section 22892 of the Public Employees Medical and Hospital Care Act (PEMHCA) establishes the minimum employer medical contribution. The CalPERS Board annually adjusts the employer contribution to reflect any change in the Medical Care Component of the Consumer Price Index, rounded to the nearest dollar. The table below shows the minimum employer contribution required by CalPERS for the last six years, and the 2025 rate:
Calendar Year
Employer Contribution
2019
$136.00
2020
$139.00
2021
$143.00
2022
$149.00
2023
$151.00
2024
$157.00
2025
$158.00
This action is necessary to meet the requirement that the governing body adopt a resolution agreeing to the minimum contribution amount established by CalPERS.
The City currently contributes to medical premiums in accordance with the terms of the existing agreements between each of the bargaining units, based on the health plan and family status employees elect and for which they are eligible. For both retirees and active employees, the total amount the City contributes towards medical benefit premiums exceeds the statutory minimum contribution required by CalPERS.
FISCAL IMPACT
This action is for administrative purposes only. There is no fiscal impact associated with this report because the City’s current contribution toward employee medical premiums as provided for in applicable Memoranda of Understanding has already been established and this action does not provide an increase to the current total City contribution towards medical premiums.
STRATEGIC INITIATIVES
This agenda item is a routine operational item and does not relate to one of the City Council’s Strategic Initiatives.
NEXT STEPS
The change in the PEMHCA minimum will be reflected in the City’s Benefits Summary effective January 1, 2025.
Prepared by: Cheryl Vance, Human Resources Analyst II
Recommended by: Brittney Frye, Director of Human Resources Approved by:
Dustin Claussen, Interim City Manager
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