04-112 CA Public Employees Retirement System-Medicare Coverager'~ - `i ',
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
Telephone: (408) 777-3213
Fax;~anRl ~~~_~~n9
HUMAN RESOURCES
SUMMARY
Agenda Item No. , I
SUBJECT AND ISSUE
Meeting Date: October 18, 2004
Adopt a resolution authorizing the Human Resources Manager to sign an application and
agreement with the California Public Employees' Retirement System to amend Medicare
coverage.
BACKGROUND
In February 2004, the City Council authorized optional Medicare coverage for employees
hired prior to April 1986 as negotiated with employee bargaining units. The coverage
requires an amendment to the City's California. State Social Security Agreement which is
administered by Ca1PERS. Adhering to prescribed Ca1PERS requirements and timelines,
the City recently completed employee Medicare elections. Optional Medicare coverage is
scheduled to begin on January 1, 2005.
FISCAL IMPACT
Of the twenty employees who began working for the City prior to April 1986, six have
elected Medicare coverage. The total annual c~~st for providing this coverage is $5,452.
RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. 04- ~~~'{ authorizing the
Human Resources Manager to sign the attached application and agreement providing
employees hired prior to April 1986 with the option to participate in Medicare.
Submitted by:
Sandy Abe
Human Resources Manager
Approved by:
David W. Knapp
City Manager
Printed on Recycled Paper
RESOLUTION NO. 04-424 ~~
(To Accompany Applic~~tion and Agreement)
WHEREAS, a division of the California Public Employees' Retirement System
with respect to eligible employees of the City of Cupertino, hereinafter referred to as
"Public Agency", who are members of and in positions covered by said retirement
system, has been conducted in accordancE: with Federal and State Laws and State
regulations for the purposes of coverage under the insurance system established by the
Federal Social Security Act and a deemed retirement system, hereinafter referred to as
Group B of the California Public Employees' Retirement System, has been established
thereby as provided in Section 218(d)(6) of the Federal Social Security Act, composed
of positions of members of such retirement system who desire coverage under the
Health Insurance system established by the Federal Social Security Act; and
WHEREAS, the Public Agency desire:: to file an application with the State and to
enter into an agreement with the State to extend coverage under the said insurance
system on behalf of the Public Agency to services performed by individuals as
employees of the Public Agency as memt-ers of a coverage group, as defined in
Section- 218(d)(4) of the Federal Social S~:curity Act, of the said Group B of the
California Public Employees' Retirement System; and
WHEREAS, official form "Application and Agreement, PERS-MED-32D"
containing the terms and conditions under wf•lich the State will effect such .inclusion has
been examined by this body;
NOW, THEREFORE, BE IT RESOLVED, that said Application and Agreement
on said official form be executed on behalf of the Public Agency and submitted to the
State to provide coverage under the California State Social Security Agreement of
March_ 9, 1951, of all services performed b~~ individuals as employees of the Public
PERS-MED-33D 1 Resolution (Division) '
Agency as members of a coverage group (a:~ defined in Section 218(d)(4) of the Social
Security Act) of said Group B of the California Public Employees' Retirement System,
except the following:
1. All services excluded from coverage under the agreement by Section 218
of the Social Security Act; and
2. Services excluded by option of 'the Applicant as indicated in Resolution
No. 04-271 adopted at a meeting of the City Council the 17th day of
February, 2004:
No optional exclusions
Effective date of coverage of services under :paid agreement to be January 1, 2005; and
BE IT FURTHER RESOLVED, that Sandy Abe, Human Resources Manager,
10300 Torre Avenue, Cupertino, CA 95014, is hereby authorized and directed to
execute said Application and Agreement on behalf of and as Authorized Agent of the
Public Agency and to forward same to the St~~te for acceptance and further action; and
BE IT FURTHER RESOLVED, that authority hereafter to act as Authorized
Agent, and so to conduct all negotiations, conclude all arrangements, submit all reports,
and sign all agreements and instruments whi~:h may be necessary to carry out the letter
and intent of the aforesaid application and agreement, in conformity with all applicable-
Federal and State laws, rules and regulation~~, is vested in the position of Human
Resources Manager.
CITY OF CUPERTINO
Presiding Officer
I (-~
PERS-MED-33D 2 Resolution (Division)
Return original and one copy to:
California Public Employees' Retirement System
Actuarial and Employer Services Division
Public Agency Contract Services
P.O. Box 942709
Sacramento, CA 94229-2709
This is your contract for Medicare
coverage. Please read carefully.
File State-approved copy in
permanent file
APPLICATION ACID AGREEMENT
For the purposes of this application and agreement, any reference made herein
to any State or Federal statute or statutes, or regulations, or part thereof, applies to all
amendments thereto now or hereafter made.
For the purposes of this application and agreement, "Federal System" means
Old-Age, Survivors, and Disability and He~~lth Insurance system established by the
Federal Social Security Act, "Federal agency" means the Commissioner of Social
Security, or successor in function to such officer, "Board" means the Board of
Administration of the California Public Employees' Retirement System, acting on behalf
of the State of California.
The City of Cupertino, a public agE:ncy as defined in Section 22009 of the
Government Code* hereinafter called Applicant, hereby makes application to the Board
to execute a modification to the California ~>tate Social Security Agreement extending
thereunder the "Medicare Only" coverage in conformity with Section 218(n) of the
Social Security Act; to all services performed by individuals as employees of the
Applicant in a coverage group (as defined in Section 218(d)(4) of the Social Security
Act*) of Group B, California Public Employees' Retirement System, a deemed
retirement system established by division of a retirement system pursuant to Section
218(d)(6) of the Social Security Act, composed of positions of members desiring
coverage under said insurance system, except the following:
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PERS-MED-32D 1 Application and Agreement (Division)
1. Those services mandatorily excluded from said agreement by Section 218
of the Social Security Act.*
2. The following services excluded by option of the Applicant pursuant to
Resolution No. 04-271 adopted on February 17, 2004:
No optional exclusions*
*See Attachment
In order to carry into effect the common governmental duties under such statutes
and in consideration of the mutual promise: hereinafter made, the Applicant and the
Board agree as follows:
I. The Board will execute a m~~dification to the California State Social
Security Agreement to extend thereunder the "Medicare Only" coverage
the services of employees of At~plicant as hereinbefore applied for.
2. Applicant will comply promptly ;end completely, throughout the term of this
application and agreement, with the letter and intent of all statutes of the
State of California, and Section 218 of the Federal Social Security Act,
and applicable Federal and State regulations adopted pursuant thereto.
3. Applicant will pay as the State regulation may prescribe, amounts
equivalent to the sum of taxes (employer-employee contributions) which
would be imposed under the 1=ederal Insurance Contributions Act if the
services of employees covered by the application and agreement
constituted employment as defined in such Act. Applicant shall keep or
cause to be kept accurate records of all remuneration for such services,
said records to be maintained ~ls required by Federal or State regulations,
and said records shall be avail~~ble for inspection or audit by the Board or
its designated representative.
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PERS-MED-32D 2 Application and Agreement (Division)
4. Applicant will prepare and subnnit such wage and other reports as may be
required.
5. Applicant will pay and reimburse the State at such times as may be
determined by the State:
(a) Any sums of money that the State may be obligated to pay or forfeit
to the Federal Government by reason of any failure of the
Applicant, for any cause or reason, to pay the contributions,
penalties, or interest required by the agreement between the
Federal agency and the State at such time or in such amounts as
required by the said agreement and any State or Federal
regulations adopted pursuant thereto.
(b) In such amounts as may be determined by the State, its
proportionate share of any and all costs incurred by the State in the
administration of the FE~deral System as it affects the Applicant
and its employees.
(c) In such amounts as may be determined by the State, the cost of
any and all work and services relating to any division for the
purposes of coverage under the Federal System held with respect
to the coverage group for which coverage is requested herein.
(d) In such amounts as ma~~ be determined by the State, the costs of
any audits of the books and records of the Applicant made by the
State or its designated representatives pursuant to Section 22559
of the Government Code.
6. The coverage herein provided fir shall be effective January 1, 2005.
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PERS-MED-32D 3 Application and Agreement (Division)
7. That, subject to the afores;~id provisions and applicable law, this
application and agreement mar be amended by the mutual consent of the
parties in writing.
8. After the filing of this applic~~tion and agreement, its acceptance and
execution by the State shall constitute it a binding agreement between the
Applicant and the State of California with respect to the matters herein set
forth.
ACCEPTED:
CIT`r OF CUPERTINO
Signed by
Autf-iorized Agent
And by
(Witness)
(TitlE:)
(Date)
STATE OF CALIFORNIA
BOARD OF ADMINISTRATION
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
BY
Manager, Public Agency Contract Services
Actuarial and Employer Services Division
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PERS-MED-32D 4 Application and Agreement (Division)
ATTACFIMENT
Section 22009, Government Code:
"Public Agency" means the State, any city, county, city and county, district, municipal or
public corporation or any instrumentality thereof, or boards and committees established
under Chapter 10 of Division 6 of the Agri~~ultural Code, Chapter 754 of Statutes of
1933, as amended, or Chapter 307 of the Statutes of 1935, as amended, the
employees of which constitute one or more coverage groups or retirement system
coverage groups.
Section 218(d)(4):
For the purposes of subsection (c) of this section, the following employees shall
be deemed to be a separate coverage group:
(A) all employees in positions which were covered by the same retirement
system on the date the agreerent was made applicable to such system
(other than employees to who:>e services the agreement already applied
on such date);
(B) all employees in positions which became covered by such system at any
time after such date; and
(C) all employees in positions which were covered by such system at any time
before such date and to whose services the insurance system established
by this title has not been extended before such date because the
positions were covered by such retirement system -including employees
to whose services the agreement was not applicable on such date
because such services were excluded pursuant to subsection (c)(3)(B).
The following services are mandatorily excluded:
(a) service performed in a policernan's or fireman's position, covered by a
retirement system at the time coverage is extended to the Public Agency;
(b) service performed by an individual who is employed to relieve him from
unemployment;
(c) service performed in a hospital, home, or other institution by a patient or
inmate thereof;
(d) covered transportation service (as defined in Section 210(k) of the Social
Security Act, as amended);
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PERS-MED-32D 5 Application and Agreement (Division)
(e) service (other than agricultural labor or service performed by a student)
which is excluded from employment by any provision of Section 210(a) of
the Social Security Act, other than paragraph 7 of such section, or service
the remuneration for which is excluded from wages by paragraph (2) of
Section 209(h);
(f) service performed by an individual as an employee on a temporary basis
in case of fire, storm, snow, earthquake, or similar emergency;
(g) services performed by election officials or election workers for each
calendar year in which the remuneration paid for such service is less than
the threshold amount mandated by law. (The threshold amount as of
January 1, 2002 was $1,200.)
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PERS-MED-32D 6 Application and Agreement (Division)