Agenda Item 8
February 25,2014
Public Hearing
MEMORANDUM
February 21, 2014
TO:
FROM:
County Council
Robert H. Drummer, Senior Legislative Attorney
:M·
( ;.. . .' \
Wage Requirements-
SUBJECT:
Public Hearing:
Bill 14-14, Contracts and Procurement
Health Insurance - Amendments
Bill 14-14, Contracts and Procurement - Wage Requirements
Health Insurance ­
Amendments, sponsored by Councilmembers Navarro, Berliner, Riemer, EIrich, and Floreen, was
introduced on February 4. A Government Operations and Fiscal Policy Committee worksession
is tentatively scheduled for March 3 at 2:00 p.m.
Bill 14-14 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, known as the Living Wage Law, is codified at §11B-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.
 PDF to HTML - Convert PDF files to HTML files
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
F:ILAWIBILLSII414 Wage Requirements - Health InsurancelPublic Hearing !v1emo.Doc
Circle
#
1
4
2
 PDF to HTML - Convert PDF files to HTML files
Bill No.
14-14
Conceming: 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: -'-!N=on":"e=-:-_-::--_ _ __
Ch. _ _, Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Navarro, Berliner, Riemer, EIrich, and Floreen
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 lIB, Contracts and Procurement
Article VI, Wage Requirements
Section lIB-33A
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
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:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 14-14
1
Sec. 1. Section IlB-33A is amended as follows:
2
3
*
(d)
Health insurance.
[If a]
*
*
4
5
ill
Definitions. As used in this subsection;
Health insurance
means insurance coverage that is part of an
6
7
employer benefit package that
Pill
for medical expenses
incurred
Qy
an employee and an employee's family either
Qy
reimbursing the employee or
Qy
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
8
9
10
11
12
13
and independent unit of Maryland State government established
in Title
11
of the Maryland Insurance Code.
14
15
16
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. §36B(c)(2)(C), as amended.
17
18
19
ill
A contractor or subcontractor [commits in its bid or 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
20
21
22
23
24
.em
~
cash payment equal to the hourly average cost to the
25
employee for
~
Silver plan on the Maryland Health Benefit
Exchange less 9.5% of the employee's hourly salary.
26
®
f:\law\bills\1414 wage requirements - health insurance\bill a.doc
 PDF to HTML - Convert PDF files to HTML files
BILL No. 14-14
27
28
ill
The contractor or subcontractor [may] must [:( 1)] certify in its bid
or proposat
29
30
31
32
®
the per-employee hourly cost of the employer's share of
the premium for that insurance[,t and
[(2)]
(ill
[reduce the wage paid under subsection (e) to any
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.
33
34
35
36
37
38
39
ill
The Executive must adopt
~
Method
~
regulation establishing
guidelines for calculating the amount of the cash payment option
in subparagraph
Q1
*
Sec. 2.
Effective date.
(a)
*
*
40
41
42
43
44
45
The amendments to Section IlB-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.
(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.
46
47
48
49
50
o
f:\law\bills\ 1414 wage requirements - health insurance\bill a.doc
 PDF to HTML - Convert PDF files to HTML files
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 performs 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:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENAL TIES:
Contractual remedies.
f:\law\bills\ 1414 wage requirements - health insurance\legislative request re