State of California

M E M O R A N D U M

                                                      Date:  October 20, 1994  
TO:       PERSONNEL MANAGEMENT LIAISONS           Reference Code:  94-59  


          THIS MEMORANDUM SHOULD BE DISTRIBUTED TO:
          ALL ACCOUNTING OFFICERS AND BUDGET OFFICERS


FROM:     Department of Personnel Administration
          Benefits and Training Division

SUBJECT:  ADMINISTRATIVE FEE - PREMIUM ONLY PLAN (POP)

 
     The Premium Only Plan (POP) is for all employees who pay an out-of-pocket health
     and/or dental premium.  Under POP the employees' out-of-pocket cost for health and /or
     dental premiums is taken out of their paycheck before federal, state, and social security
     taxes are deducted.  Employees who elect to enroll in FlexElect also receive this tax
     benefit but are not included in the POP administrative fee assessment.
     
     The annual administrative fee assessed for employees enrolled in the POP for the 1994-
     95 fiscal year is $4.20 ($.35 per pay period).  Previously this fee was assessed semi-
     annually by the State Controller's Office (SCO), during the November and May pay
     periods.  Effective immediately, this fee will be assessed by SCO three times a year. 
     For the 1994-95 fiscal year it will be reflected in the November, February, and May pay
     periods.  During those pay periods, $1.40 will be assessed for each POP participant.  For
     fiscal year 1995-96 and beyond, the $1.40 fee will be assessed during the August,
     December, and April pay periods.
     
     If you have any questions regarding this information, please contact Karen Alejo of my
     staff at (916) 324-9366 or CalNet 454-9366.
     
     
     
     
     
     Patricia Pavone, Chief
     Benefits and Training Division