CalPERS Submits Application for Federal Early Retiree Reinsurance Program Reimbursement Funds

On June 29, the California Public Employees’ Retirement Association (CalPERS) submitted an application to the federal government on behalf of all State and Public Employees Medical and Hospital Care Act (PEMHCA) contracting agencies for Early Retiree Reinsurance Program (Program) monies. 

The temporary Program, funded through the federal Patient Protection and Affordable Care Act of 2010, provides reimbursements to participating employee-based health plans for a portion of costs related to health benefits for retirees, their spouses, surviving spouses and dependents. Employers that are accepted into the program will receive reinsurance reimbursement for retirees who are over the age of 55 and not yet eligible for Medicare. On June 16, the CalPERS Board of Administration voted to use any reinsurance monies received through the Program to offset 2011 health care premiums; since there are specific requirements on how health plan sponsors (in this case, CalPERS) may use the reimbursement funds, the funds will be collected by CalPERS and will not be distributed to contracting agencies. 

The Program will end no later than January 1, 2014. Please click here to view specific information, by region, on what health care costs will be with the reinsurance applied. Click herefor the letter circulated by CalPERS regarding their participation in the Program.

Legislation Mandating Collective Bargaining for Public Safety Employees Passes House

The United States House of Representatives, on July 1, passed a bill that includes language granting firefighters and police officers minimum collective bargaining rights by establishing minimum state standards for collective bargaining laws. H.R. 4899, a supplemental appropriations bill, was amended to include the Public Safety Employee Cooperation Act (Act), which was moving through the federal legislative process as H.R. 413 and S. 3194 prior to its incorporation into H.R. 4899. The amendment requires all states to allow collective bargaining for public safety officers; if the state does not establish their own collective bargaining process, the Federal Labor Relations Authority would issue regulations to function as labor laws in that state. If a state is already in compliance, it would be exempt from further federal oversight. The minimum collective bargaining standards included in the Act are:

• The right of workers to form unions and bargain over wages, hours and terms and conditions of employment.
• Requiring an impasse resolution mechanism (such as arbitration or mediation).
• The right of both parties to sign legally enforceable contracts.

H.R. 4899 now moves to the Senate and is expected to be taken up this month.

Supreme Court Upholds Ruling that PERB Has Initial Jurisdiction over Legality of Public Employees Strikes

The California Supreme Court, on July 1, upheld the decision by the Sixth District Court of Appeal that the Public Employment Relations Board (PERB) has initial jurisdiction over whether a strike by public employees violates the Meyers-Milias-Brown Act (Brown Act) and that public agencies subject to the Brown Act must exhaust all of its administrative remedies with PERB prior to seeking judicial relief unless it is able to establish an exception to this requirement. 

In 2006, the City of San Jose (City) began negotiating a new contract with the Operating Engineers Local No. 3 (OE3). Both OE3 and the City agreed that should an impasse occur, OE3 would give the City 72 hours of notice regarding a possible strike. An impasse was reached and after OE3 advised the City of an impending strike, the City responded that they would be seeking a court order to stop an employee whose duties were essential to public health and safety from striking; they did so with the superior court on June 1, 2006.

Alleging that the City failed to meet and confer in good faith and by seeking a court order, interfered with members’ rights to participate in union activities, OE3 filed an unfair practice charge with PERB, claiming that PERB has exclusive jurisdiction over whether a strike violates the Brown Act and accordingly, the City must first exhaust its administrative remedies with PERB prior to seeking injunctive relief. The superior court agreed with OE3, and the Sixth District Court of Appeals affirmed, additionally finding that the available remedies through PERB were sufficient. 

On July 1, the California Supreme Court upheld the Sixth District Court of Appeals’ decision that judicial relief should be sought through PERB instead of the courts, adding that an exception may occur when it is clear that PERB’s remedies would be inadequate.