09.01.2017
PERB Allows School District to Enforce Longstanding, but Previously Unenforced Limits on the Employer Contribution for Post-Retirement Medical Benefits

In a case successfully litigated by this firm, an administrative law judge for the Public Employment Relations Board (“PERB”) determined a school employer was within its rights to enforce long-standing, but previously unenforced collective bargaining language that limited the community college district’s (“District”) contributions for post-retirement health benefits for retirees in the CalPERS medical benefit system.  California School Employees v. San Mateo County Community College District, 42 PERC ¶ 8, 2017 WL 2953251.

Employers electing to participate in the CalPERS medical benefit system are governed by the Public Employees Medical and Hospital Care Act (“PEMHCA,” at Gov. Code § 22750 et seq.), which generally obligates employers to provide an “employer contribution” toward the cost of post-retirement medical benefits for both active employees and retirees.  As a general rule, subject to various exceptions, the employer contribution for retirees increases annually until it equals the employer contribution for active employees.

One significant exception authorizes school employers to collectively bargain alternate limits governing the employer contribution for retirees.  Once negotiated, such limits can be made effective prospectively (for individuals not retired at the time the agreement was negotiated), following notification to CalPERS.

In this case, the District elected to obtain medical benefits from CalPERS commencing in 1989. The District had collective bargaining language in place at that time which imposed strict limits on District-paid post-retirement medical coverage.  However, the District did not notify CalPERS of this collective bargaining language—and thus the language was not enforced—until 2015.  Following the notification, CalPERS agreed to enforce the collectively bargained limits on District-paid post-retirement medical coverage retroactive to the date that language was first negotiated.

One union filed an unfair labor practice charge, alleging the District’s actions amounted to an unlawful unilateral change in violation of the Educational Employment Relations Act (“EERA”).  A PERB administrative law judge determined the District was within its rights to enforce its existing, but previously unenforced, collective bargained limits on the employer contribution for post-retirement medical coverage, and thus determined the District’s actions did not violate the EERA.

Impact

School employers in the CalPERS medical benefit system may be able to enforce longstanding,  but previously unenforced limits on the employer contribution for post-retirement medical benefits.

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