Effective January 1, 2017, current or former employees described in Section
3.09.020, who sign an Irrevocable Election Agreement electing to receive benefits under this section, will receive a monthly reimbursement by the city for retiree medical insurance premiums.
As described below, the city will reimburse a retiree for health care premiums paid to CalPERS, minus the PEMHCA minimum contribution amount. The PEMHCA minimum contribution is paid by the city directly to CalPERS on the retiree’s behalf. The city does not make any payments on behalf of the retirees or reimbursements directly to retirees to cover any premiums or costs associated with Medicare. Retirees are solely responsible for making any and all necessary payments required for and paid directly to Medicare and the Social Security Administration.
A. Tier 1. Effective Plan Year 2017, retirees who qualify as Tier 1 pursuant to the applicable MOU will receive a city reimbursement for an amount up to $1,296.00 per month for retiree medical insurance premiums less the PEMHCA minimum. If the retiree medical insurance premium is less than $1,296.00 per month, the retiree will only be reimbursed the amount of the actual premium less the PEMHCA minimum.
For example, in 2017 the city’s reimbursement amount is up to $1,296.00 per month. If the retiree’s medical benefit insurance premium is $800.00 per month, the city’s reimbursement will be $800.00 per month less the PEMHCA minimum.
B. Tier 2. Effective Plan Year 2017, current or former employees who qualify as Tier 2 pursuant to the applicable MOU will receive a city reimbursement for a proportionate amount up to $1,296.00 per month less the PEMHCA minimum for retiree medical insurance premiums. The proportionate amount of reimbursement is based on total years of credited service as defined in the following chart. If the retiree medical insurance premium is less than the amount the retiree is eligible to receive, the retiree will only be reimbursed the amount of the actual premium less the PEMHCA minimum.
CITY TIER 2 VESTING SCHEDULE |
|---|
Total Credited Years of Service | % of City Contribution |
|---|
10 | 50% |
11 | 55% |
12 | 60% |
13 | 65% |
14 | 70% |
15 | 75% |
16 | 80% |
17 | 85% |
18 | 90% |
19 | 95% |
20+ | 100% |
For example, in 2017, the city’s maximum reimbursement amount is $1,296.00 per month. A retiree with 10 years of credited service is eligible to receive a reimbursement amount of up to $648.00 per month (50 percent of $1,296.00) less the PEMHCA minimum. A retiree with 15 years of credited service is eligible to receive a reimbursement amount of up to $972.00 per month (75 percent of $1,296.00) less the PEMHCA minimum. If the retiree, with 15 years of credited service, has a medical benefit insurance premium of $800.00 per month, the city’s reimbursement will be $800.00 per month less the PEMHCA minimum.
For those opting to receive benefits under this section and effective January 1, 2018 and each subsequent January, the amount of the city’s reimbursement will increase by two percent, rounded to the nearest dollar (for example, on January 1, 2018, the Tier 2 retiree with 10 years of service will qualify for a reimbursement of up to $661.00 less the PEMHCA minimum). Retirees are not eligible to receive any amount in excess of the actual retiree medical insurance premium. To receive and remain eligible for the city reimbursement, the retiree must be enrolled in a CalPERS health plan and subject to PEMHCA at all times.
(Ord. 5496 § 1, 2015; Ord. 6544 § 3, 2022)