Memorandum of Understanding with Unit 12 - Dpa - State of California

2. As to any employee who enters state service or leaves state service during afiscal year, contributions for such employee shall be made on a pro rata basis. Asimilar computation shall be used for anyone entering or leaving the bargaining unit(e.g., promotion in mid-fiscal year).3. The money shall be available as defined in SB 514.4. Pursuant to that bill, a Rural Healthcare Equity Trust Fund(s) (hereafter Fund) willbe established with a separate account for Bargaining Unit 12 members, as one ofseveral similar accounts.5. Each Unit 12 employee shall be able to utilize up to $1,500 per year, pursuant tosaid bill, but with the exceptions for greater utilization hereafter noted. The pro ratalimitation pursuant to paragraph 2. is applicable here.6. If an employee does not utilize the complete $1,500 pursuant to the proceduresand limitations described in the bill, then the unused monies shall be put in a “sameyear pool”. That same year pool shall be utilized to pay those who have incurredhealth care expenses in excess of $1,500, but again according to the proceduresand limitations in the attached bill. The monies in the same year pool would bedistributed at the end, or even soon after, each fiscal year to that group ofemployees who had expenses in excess of $1,500 in the relevant fiscal year. Thosemonies shall be distributed on a pro tanto (pro rata) basis.a. Any employee not in Bargaining Unit 12 all year shall receive credit underthis paragraph 6 utilizing the same pro rata formula as in paragraph 2 above.b. If an employee is entitled to less than $25.00 under this paragraph 6, themoney shall instead go into next year’s fund pursuant to paragraph 7hereafter.7. If monies still remain after a distribution to such employees (i.e. all employeeswho spent more than $1,500 as provided in the bill were completely reimbursed),then those surplus monies shall be rolled over into the next fiscal year’s fundsavailable for distribution to employees whose expenses pursuant to the bill exceed$1,500 in such subsequent year. Similar “rollovers” would occur in any years whereall employees were completely reimbursed (or had payments made on their behalf)pursuant to the bill and monies still remained in the pool.8. Beyond the text of the bill, the parties will structure and administer the fund inaccordance with all applicable IRS and other regulatory statutes and rules.9. Interest earned from the fund(s) shall be used to offset administrative costs.10. Notwithstanding the above, if the IRS shall determine that the above benefitviolates its statutes or rules (e.g., the payments by the State employer are taxable),then the above provisions shall be of no further force and effect. The parties willnegotiate under the Dills Act for a replacement benefit, which shall be “cost neutral”to the employer.3.3 Pre-Tax of Health/Dental Premiums CostsEmployees who are enrolled in any health and/or dental plan which requires a portion of thepremium to be paid by the employee, will automatically have their out-of-pocket premiumcosts taken out of their paycheck before Federal, State and social security taxes arededucted. Employees who choose not to have their out-of-pocket costs pre-taxed, mustmake an election not to participate in this benefit.29BU 12(99-01)