This law requires all public employees and certain public retirees to contribute toward the cost of health care benefits coverage based upon a percentage of the cost of coverage.
All active public employees will pay a percentage of the cost of health care benefits coverage for themselves and any dependents. Lower compensated employees will pay a smaller percentage and more highly compensated employees will pay a higher percentage. In addition, the applicable percentage will vary based upon whether the employee has family, individual, or member with child or spouse coverage. The rates gradually increase based on an employee’s compensation, at intervals of $5,000. These rates will be phased in over several years for employees employed on the contributions effective date who will pay ¼, ½, and ¾ of the amount of the contribution rate during the first, second and third years, respectively, meaning during the three 12-month periods after the contribution rates become effective.
The law establishes a floor for employee contributions so that no employee will pay an amount that is less than 1.5% of the employee’s compensation. Employees who pay for health care benefits coverage based upon a percentage of the cost of coverage will not also be required to pay the minimum contribution of 1.5% of compensation, as provided by other laws. The contribution will commence on the law’s effective date for certain public employees and upon the expiration of a collective negotiation agreement for others.
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