ITEM #: 2.
DATE: 06/03/2024
AI #:2073
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CITY COUNCIL ACTION REPORT
| SUBJECT: |
RETIREE HEALTHCARE
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| STAFF PRESENTER(S): |
Lyman Locket, Human Resources Director, Jared Askelson, Finance Director |
Summary
Review and decision points related to eligibility and loss of coverage for the implementation of Retiree Healthcare. (Lyman Locket, Human Resources Director, Jared Askelson, Finance Director)
FISCAL IMPACT
The fiscal year 2025 budget includes $180,000 of ongoing funding for anticipated benefit costs and $3.5 million of one-time funding to be set aside for benefits earned in prior years. The five-year forecast includes increases in ongoing costs in line with anticipated benefit cost increases and growth in the number of eligible retirees. The forecast also includes annual payments to fully fund benefits earned in prior years in approximately seven years.
BACKGROUND AND PREVIOUS ACTIONS
At the December 11, 2023 Council work session, Council reached consensus on the creation of a retiree healthcare plan for eligible retirees. The plan design framework will be a bridge plan that covers retirees from the point of retirement to the age of Medicare eligibility. The premium equivalency rate will be 50% retiree, and 50% city. Rates are based on the full premium rate that is established on an annual basis for active employees. Eligibility rules include reaching normal retirement as defined by PSPRS or ASRS for members of each plan. Retirees must also complete ten consecutive years of service immediately preceding their retirement and elect the retiree healthcare plan without a gap in coverage. For Council members, eligibility requires serving two full consecutive terms. At the end of the final term, Council members must elect the retiree healthcare plan without a gap in coverage. At the December 18, 2023 Council meeting, Council took action to approve the framework for the retiree health plan. This action set in motion the creation of a transition plan and eligibility for the retiree healthcare plan for employees who retire between January 1, 2024 through June 30, 2024. This action also provided direction to finalize the retiree healthcare plan design for implementation on July 1, 2024 as outlined above.
Attachments