Agenda Item 5B
February 4,2014
Introduction
MEMORANDUM
January 31, 2014
TO:
FROM:
County Council
Robert
H.
Drummer, Senior Legislative Attorney
~
Introduction:
Bill 14-14, Contracts and Procurement - Wage Requirements
SUBJECT:
Health Insurance - Amendments
Bill 14-14, Contracts and Procurement - Wage Requirements
Health Insurance ­
Amendments, sponsored by Councilmembers Navarro, Berliner, Riemer and EIrich, is scheduled
to be introduced on February 4. A public hearing is tentatively scheduled for February 25 at
1:30 p.m.
Bi11I4-I4 would:
• require certain County contractors or subcontractors to provide health insurance
or a cash equivalent for employees who perform work on a County contract;
• limit the employee's share of the health insurance premium for certain employees
working on a County contract; and
• eliminate the credit against the wage requirements for the employer's share of
health insurance for certain employees working on a County contract.
Background
Bill 5-02, Procurement Service Contracts - Wage Requirements, was enacted by the
Council on June 11,2002 and signed into law by the County Executive on June 20, 2002. This
law is codified at
§
I1B-33A of the County Code. The Living Wage Law requires certain
businesses which provide services (but not goods) to the County to pay employees working on a
County contract a minimum living wage that was originally set at $10.50 per hour effective July
1,2003. The law requires the Chief Administrative Officer to adjust this rate each July 1 by the
annual average increase, if any, in the Consumer Price Index for all urban consumers for the
Washington-Baltimore metropolitan area. The current living wage is $13.95 per hour. The
Living Wage Law does not require employers to provide health insurance, but employers are
given credit toward the wage rate for the cost of any health insurance provided.
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Bill 14-14 would eliminate the health insurance credit and require County contractors
subject to the Living Wage Law to provide health insurance or a cash equivalent for employees
who work on the County contract The Bill would also require that the health insurance be
affordable and provide the minimum essential health benefits required by the Federal Patient
Protection and Affordable Care Act
This packet contains:
Bill 14-14
Legislative Request Report
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Bill No.
14-14
Concerning: Contracts and Procurement
- Wage Requirements - Health
Insurance - Amendments
Revised: December 18,2013 Draft No.
~
Introduced:
February 4, 2014
Expires:
August 4, 2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: -!,.!.No::!!n.!.!:e'--_ _ _ _ __
ChI _ _, Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Navarro, Berliner, Riemer and EIrich
AN
ACT
to:
(1)
(2)
(3)
(3)
require certain County contractors or subcontractors to provide health insurance or a
cash equivalent for certain employees working on a County contract;
limit the employee's share of the health insurance premium for certain employees
working on a County contract;
eliminate the credit against the wage requirements for the employer's share of health
insurance for certain employees working on a County contract; and
generally amend the law governing wage requirements for County contractors and
subcontractors.
By amending
Montgomery County Code
Chapter 11 B, Contracts and Procurement
Article VI, Wage Requirements
Section IlB-33A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Added to existing law
by
original
bill.
Deletedfrom existing law
by
original
bill.
Added
by
amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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BILL
No. 14-14
1
Sec.
1.
Section IlB-33A is amended as follows:
2
3
4
*
(d)
Health insurance.
[If
a]
*
*
ill
Definitions. As used in this subsection;
Health insurance
means insurance coverage that is part of an
employer benefit package that
Pm
for medical expenses
incurred
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7
8
9
10
11
12
12Y
an employee and an employee's family either
12Y
reimbursing the employee or
12Y
paying the care provider directly
and provides the minimum essential health benefits required
under the Patient Protection and Affordable Care Act, 26 U.S.C.
§5000A, as amended.
Maryland Health Benefit Exchange
means the public corporation
and independent unit of Maryland State government established
in Title
.ll
of the Maryland Insurance Code.
l3
14
15
m
The employee's share of the premium for individual health
insurance must be affordable as defined for an employer­
sponsored plan under the Patient Protection and Affordable Care
Act, 26 U.S.C. §36BCc)(2)(C), as amended.
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18
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ill
[If a] A contractor or subcontractor [commits
III
its bid or
20
21
proposal to] must provide for an employee who provides services
to the County:
(A)
health insurance [to any employee who provides services
to the County, the]; or
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25
26
ill)
.§;
cash payment equal to the hourly average cost to the
employee for
.§;
Silver plan on the Maryland Health Benefit
Exchange less 9.5% of the employee's hourly salary.
-0-
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BILL No. 14-14
27
28
ill
The contractor or subcontractor [may] must [:(1)] certify in its bid
or
proposal~
fA}
the per-employee hourly cost of the employer's share of
the premium for that insurance[,]; and
[(2)]
.cID
[reduce the wage paid under subsection (e) to any
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33
employee covered by the insurance by all or part of the
per-employee hourly cost of the employer's share, of the
premium] the employee's share of the premium for that
msurance.
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36
ill
The Executive must adopt
in subparagraph
ill
~
Method
~
regulation establishing
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guidelines for calculating the amount of the cash payment option
*
Sec. 2. Effective date.
(a)
*
*
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The amendments to Section llB-33A, inserted in Section 1 of this Act,
apply to any contract for which the County government released a
solicitation on or after the date this Act takes effect.
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(b)
At the request of the contractor, the Executive must renegotiate the
terms of any contract entered into before this Act takes effect to
reimburse the contractor for the increased cost of voluntarily adding a
health insurance benefit that complies with this law for its employees
who perform work for the County. The increased cost to the County
must not be greater than $4000 per year for each covered employee.
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@
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LEGISLATIVE REQUEST REPORT
Bill 14-14
Contracts and Procurement
-
Wage Requirements
-
Health Insurance
-
Amendments
DESCRIPTION:
Bill 14-14 would require a contractor to provide health insurance for
each employee who perfonns work on a County contract or a cash
equivalent. The Bill would also eliminate the credit against the wage
requirements for the employer's share of health insurance.
Many County contractors do not provide health insurance for their
employees.
The goal is to increase the number of County residents who have
health insurance.
Procurement, County Attorney
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, 240-777-7895
Not applicable.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIEN CE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Contractual remedies.
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