SENIOR SENATE FEDERAL PROPOSAL NO. 3

INTRODUCED BY SENIOR ASSEMBLY MEMBER MURPHY

(COAUTHOR: SENIOR SENATOR GEHRIG)

LEGISLATIVE COUNSEL'S DIGEST

SFP 3: PROTECTION OF HEALTH BENEFITS FOR RETIREES.

 UNDER EXISTING LAW, AN EMPLOYEE'S PENSIONS AND BENEFITS ARE GOVERNED BY THE EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA).

THIS MEASURE WOULD MEMORIALIZE THE CONGRESS AND THE PRESIDENT TO ENACT LEGISLATION WHICH WOULD PREVENT EMPLOYERS FROM REDUCING OR ELIMINATING HEALTH BENEFITS PROVIDED TO RETIRED EMPLOYEES.

VOTE: MAJORITY.

SFP 3: RELATING TO PROTECTION OF HEALTH BENEFITS FOR RETIREES

WHEREAS, ACCORDING TO RECENT ESTIMATES, UP TO 10 MILLION RETIREES THROUGHOUT THIS COUNTRY HAVE EITHER HAD THEIR HEALTH BENEFITS REDUCED OR ELIMINATED OVER THE LAST DECADE; AND

WHEREAS, AS REPORTED IN THE WALL STREET JOURNAL, OVER THE NEXT TWO YEARS HUNDREDS OF THOUSANDS OF RETIREES OF A FORTUNE 500 COMPANY IN THE UNITED STATES WILL BE FACED WITH INCREASES IN HEALTH CARE PREMIUMS AS HIGH AS 500 PERCENT; AND

WHEREAS, OTHER FORTUNE 500 COMPANIES IN THE UNITED STATES ARE ALSO RENEGING ON RETIREE HEALTH BENEFITS; AND

WHEREAS, THE RECENTLY ENACTED MEDICARE REFORM BILL PROVIDES INCENTIVES FOR COMPANIES TO DISCONTINUE PRESCRIPTION DRUG COVERAGE FOR MILLIONS MORE RETIREES, MAKING A BAD SITUATION MUCH WORSE; AND

WHEREAS, WE HAVE A RESPONSIBILITY TO PROTECT THE RETIREMENT HEALTH BENEFITS EARNED BY OUR NATION'S SENIOR CITIZENS, MANY OF WHOM SPENT THEIR ENTIRE CAREERS AT FORTUNE 500 COMPANIES; NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR SENATE AND THE SENIOR ASSEMBLY, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2004 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE UNITED STATES LABOR CODE BE AMENDED TO PREVENT PROFITABLE COMPANIES FROM INCREASING THEIR PROFITS BY CUTTING THE HARD-EARNED HEALTH BENEFITS OF RETIREES AND TO INCLUDE PROVISIONS SIMILAR TO THOSE PROVISIONS THAT WERE CONTAINED IN H.R. NO. 1322, THE EMERGENCY RETIREE HEALTH BENEFITS PROTECTION ACT OF 2003, THAT WOULD DO THE FOLLOWING:

(1) PROHIBIT GROUP HEALTH PLANS FROM MAKING POST-RETIREMENT REDUCTIONS IN RETIREE BENEFITS.

(2) REQUIRE GROUP HEALTH PLANS TO CONTAIN PROVISIONS BARRING POST-RETIREMENT CUTS IN RETIREE HEALTH BENEFITS.

(3) REQUIRE EMPLOYERS TO RESTORE HEALTH BENEFITS THAT WERE REDUCED FOLLOWING AN EMPLOYEE'S RETIREMENT.

(4) PROVIDE AN EXEMPTION FOR EMPLOYERS WHO ARE UNABLE TO RESTORE BENEFITS BECAUSE COMPLIANCE WITH THE PROVISIONS WOULD, AS DETERMINED BY THE SECRETARY OF LABOR, CAUSE THAT EMPLOYER TO EXPERIENCE A SUBSTANTIAL BUSINESS HARDSHIP.

(5) CREATE A LOAN GUARANTEE PROGRAM TO ASSIST EMPLOYERS IN RESTORING RETIREE HEALTH BENEFITS; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE CONGRESS AND THE PRESIDENT TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE PRESIDENT AND VICE PRESIDENT, THE SPEAKER OP THE HOUSE OF REPRESENTATIVES, THE CHAIRPERSONS OF THE HOUSE AND SENATE COMMITTEES ON AGING, AND TO EACH SENATOR AND REPRESENTATIVE FROM CALIFORNIA IN THE CONGRESS OF THE UNITED STATES.

RN0415456

- 0 -