State of California M E M O R A N D U M REFERENCE CODE: 98-063 DATE: December 17, 1998 TO: Personnel Officers Personnel Transactions Supervisors Personnel Transactions Staff FROM: Department of Personnel Administration Benefits Division SUBJECT: EFFECT OF CONSOLIDATED BENEFITS ON EMPLOYEES' STATEMENT OF EARNINGS AND DEDUCTIONS AND DEPENDENT CHILDREN ELIGIBILITY CRITERIA AFTER RETIREMENT FOR EMPLOYEES IN BARGAINING UNITS 8, 16, AND 19 CONTACT: William Page, Benefits Program Analyst (916) 445-9801, CALNET 485-9801 FAX: (916) 322-3769 OFFICE VISION: DPA(WILLIAMPAGE) INTERNET: WILLIAMPAGE@DPA.CA.GOV The purpose of this memo is to provide a reminder to departments that effective January 1, 1999 with the implementation of Consolidated Benefits (CoBen) the Statement of Earnings and Deductions will change for employees enrolled in CoBen. In addition, information is being provided regarding the processing of CoBen documentation and how changes in the dependent eligibility criteria for Bargaining Units 8, 16, and 19 will impact these employees and their dependent children after retirement. The following groups of employees are impacted by these changes: Bargaining Unit 8 (BU 8), the California Department of Forestry Employees Association (CDFEA), Bargaining Unit 16 (BU 16), the Union of American Physicians and Dentists (UAPD), Bargaining Unit 19 (BU 19), the American Federation of State, County and Municipal Employees (AFSCME), and Excluded employees (CoBen benefits only) Departments should refer to the Department of Personnel Administration's (DPA) PML 98-045 dated September 14, 1998, for specific information regarding CoBen benefits and the implementation of the new employee and dependent children eligibility criteria for BU 8, BU 16, and BU 19 employees. In addition, it would be helpful if each department provides the following information as a reminder to employees who are affected by the implementation of CoBen and the new eligibility criteria. IMPLEMENTATION OF CONSOLIDATED BENEFITS In accordance with the ratified Memorandum of Understandings between CDFEA, AFSCME, and the State, BU 8 and BU 19 employees will be transitioned into CoBen effective January 1, 1999. Excluded employees will also be transitioned into CoBen effective January 1, 1999. BU 16 (UAPD) employees were transitioned into CoBen effective July 1, 1998. BU 8, BU 16, BU 19, and Excluded employees will have their CoBen benefit allowance amount automatically established. For impacted employees currently enrolled in the 1998 FlexElect Cash Option, their cash enrollment will be automatically converted to CoBen Cash. Any new enrollments or changes made during the recent 1998 Open Enrollment Period (September 1-October 15, 1998) will also be effective January 1, 1999. EMPLOYEE STATEMENT OF EARNINGS AND DEDUCTIONS Under CoBen, eligible employees will see a new look to their monthly Statement of Earnings and Deductions. The statement will reflect their benefit allowance, CoBen Cash election, and benefit plan choices. These changes include some new terminology as reflected below: "BENEFITAMT" Indicates the monthly benefit allowance contributed by the State. This benefit allowance contribution will be shown as a credit under the Deductions Section of the Statement of Earnings and Deductions. "COBEN CASH" Indicates the amount received by employees who elect cash in lieu of enrolling in State-sponsored health only or in both health and dental benefits. The full premium amount and an abbreviation of the name of employees' health, dental, and vision plan carriers will also be shown under the Deductions Section. For example, vision enrollment will be shown as Vision-VSP - $8.98. To help you understand these changes, we have attached three examples that provide a comparison of what an employee's Statement of Earnings and Deductions looked like prior to implementation of CoBen and what it will look like under CoBen, based on the following scenarios: Attachment I Employee enrolled in health, dental, and vision; benefit allowance amount (BENEFITAMT) exceeds premiums. Attachment II Employee enrolled in health, dental, and vision; premiums exceed benefit allowance amount (BENEFITAMT). Attachment III Employee enrolled in vision who has elected to receive cash in lieu of health and dental benefits These examples along with a brief definition of specific terms used on the statement will be made available on DPA's website. It will be listed at www.dpa.ca.gov, "What's New!" It is anticipated that these examples will be available on our website during the latter part of December 1998. COBEN INFORMATION AVAILABLE ON DPA WEBSITE The following CoBen reference information is available on DPA's website www.dpa.ca.gov: Introducing Consolidated Benefits for Represented Employees Brochure Introducing Consolidated Benefits for Excluded Employees Brochure Frequently Asked CoBen Questions CoBen Automated Benefits Calculation Worksheet Three Examples of how the "Statement of Earnings and Deductions" will look under CoBen (Available on DPA website in the latter part of December 1998) COBEN DOCUMENTATION Whether the CoBen cash, dental, and health documents are sent to the State Controller's Office or the California Public Employees' Retirement System for processing will depend on the employee's election and the document(s) required for the transaction. A forms processing chart (Attachment IV) has been prepared to assist you in determining where the CoBen document(s), should be sent for BU 8, BU 16, BU 19, and Excluded employees only. This chart was also provided as an attachment in PML 98-045. Should you need more direction on where to send your CoBen forms you may contact the Benefits Division at DPA. EFFECT OF NEW DEPENDENT CHILDREN ELIGIBILITY CRITERIA ON EMPLOYEES IN BU 8, BU 16, AND BU 19 AFTER RETIREMENT In addition to changes in the dependent children eligibility criteria for employees in BU 8, BU 16, and BU 19, (see PML 98-045), these changes will also have an affect on those employees after retirement. Under authority of Government Code Section 22754.11 and 22754.5, departments need to be aware that the new dependent children eligibility criteria will also apply to retired employees from BU 8, BU 16, and BU 19. For all employees in BU 8 and BU 19 who retire on or after January 1, 1999, and for all BU 16 employees who retire on or after July 1, 1998, dependent children must meet the new eligibility criteria in order to be eligible for health, dental, and vision benefits. This information regarding retired employees was not communicated to departments in PML 98-045. Departments should ensure that impacted employees are aware that the new dependent children eligibility criteria will also be effective after retirement. However, retired state employees are not eligible for the CoBen benefit allowance or cash in lieu of health or health and dental benefits. CLOSING BU 8, BU 16, BU 19 and Excluded employees should be advised to direct any questions to their respective Personnel Office. Should you have any questions regarding this information, staff in the Benefits Division are here to assist you. Please contact William Page, Benefits Program Analyst at (916) 445-9801, if you have any questions. Kathie Vaughn, Chief Benefits Division Attachments will be distributed via mail.