CAPP Retiree Notice November 16, 2023 Dear Retiree The City of Hawaiian Gardens (City) recently approved changes to conform its agreement with CalPERS to participate in its health insurance program to the health benefit contributions that it has agreed to provide pursuant to its collectively bargained agreements. This change was necessary to ensure that contributions made during employment are consistent with its collectively bargained agreements. As a result of limitations of the law applicable to the CalPERS health insurance program (“PEMHCA”), this change will also impact retirees that were hired prior to March 1, 2016, including you. Please read this Notice carefully as it contains important information regarding your retiree health benefit.
Please rest assured that the amount of your retiree health benefit will not be changing. Further, because of special circumstances that apply to you (as described below), your retiree health benefit will continue to be paid directly to CalPERS by the City. However, the manner in which the City makes the payment will change.
Since you were hired prior to March 1, 2016, you will continue to be eligible for a retiree health allowance up to the PERS Platinum Region 3 Family Basic Rate + $200 per month (“Retiree Health Benefit”). The Retiree Health Benefit will continue to be available to you each month during your retirement to offset the cost of any CalPERS health plan in which you enroll.
Prior to the change described in this Notice, the City was billed by CalPERS for the full cost of your health insurance premium. The City paid the premium in full directly to CalPERS. Effective January 1, 2024, CalPERS will no longer bill the City for the full cost of your health insurance. Instead, the City will be billed for (and pay) the minimum contribution required to be paid by PEMHCA (“Minimum Contribution”). The Minimum Contribution is adjusted each year by the CalPERS Board of Administration (it is $157 for 2024).
Normally, the cost of the health insurance premium that exceeds the Minimum Contribution would be deducted from the retiree’s monthly pension check by CalPERS. However, this will not apply to you because we understand that the monthly pension that you receive from CalPERS is less than the cost of your health insurance premium after reducing it by the Minimum Contribution.
Rather, to maintain your CalPERS health insurance plan, CalPERS requires that you enroll in the Complementary Annuitant Premium Program (“CAPP”). We understand that you may have already received a letter from CalPERS similar to the sample enclosed with this Notice.
The letter includes the CAPP enrollment form. Please select “Continue Health Coverage in the Complementary Annuitant Premium Program”, sign and date it, and return it to CalPERS as soon as possible but no later than December 1, 2023. The enclosed sample includes green notes indicating the option you should select on your CAPP enrollment form, the address where your completed form needs to be mailed, and which signature block you should fill in on your form.
We request that you confirm to the City when you have submitted your enrollment form to CalPERS. You can confirm through the email or phone number noted below.
By participating in CAPP, you will be billed by CalPERS for the share of your monthly health insurance premium that is not covered by the Minimum Contribution. The first bill will require payment for two months in advance. Thereafter, you will be billed for a single month. Payment must be made by the 10th of each month. We are aware that your first payment is due December 10, 2023 for the 01/2024 and 02/2024 coverage months.
The City has confirmed that it can make these payments, including the initial two month payment, directly to CalPERS on your behalf through the CalPERS direct pay portal available at pay.calpers.ca.gov (“Direct Pay”). Therefore, you will not have to pay any portion of your premium. To access the Direct Pay portal, the City will need your last name and your 10-digit CalPERS ID. Since the City already has this information, it will access the Direct Pay portal on a monthly basis and pay the full amount required by CalPERS no later than the 5th of each month, commencing with the December payment.
We will be scheduling an informational meeting the week of December 4, 2023, please check this page for date and time. We will be updating our website regularly, for further information please visit this page: www.hgcity.org/Retire.
If you should have any questions, please contact us via email at hgretirement@hgcity.org or 562-420-2641 extension 219 to speak with Human Resources or 236 to speak with Finance.
Sincerely, Rosario Pozzoli, Human Resources Manager City of Hawaiian Gardens
