Placement: Resolutions
Action Requested: Motion / Vote
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Resolution 25-R72, Approve the Retiree Health Insurance Policy Applicable to those Hired On or After July 12, 2010 (Rule of 62)
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Submitted By: Kimberly Sala, Assistant Director, Human Resources
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Executive Summary (General Business): The City of Port St. Lucie has provided continuation health coverage to employees upon their separation from service in good standing and having met certain outlined criteria. The attached serves to amend the policy applicable to those hired on or after July 12, 2010.
Presentation Information: Staff is available to answer any questions the Council may have.
Staff Recommendation: Move that the Council approve the Retiree Health Insurance Policy applicable to those hired on or after July 12, 2010 (Rule of 62).
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the Retiree Health Insurance Policy applicable to those hired on or after July 12, 2010 (Rule of 62).
2. Move that the Council provide staff with direction.
Background: The City Council has established an employee benefits system that includes the City of Port St. Lucie Health Insurance Plan for its employees. Florida law requires the City to offer retired employees and their dependents the option of continued participation in this Health Insurance Plan after retirement. In accordance with Resolution 10-R49, passed and adopted on July 12, 2010, the City implemented a “Rule of 75” which allowed employees hired on or after July 12, 2010, and their dependents, to continue coverage if the employee separated from service in good standing, reached a minimum age of 55, had a minimum of ten (10) years of credited service, and collectively the employee’s age and years of credited service totaled at least 75. This Rule of 75 conflicted with the Subsidy Policy eligibility requirements. Therefore, the Rule of 62 is proposed to address this conflict.
Issues/Analysis: Effective July 12, 2010, the City Council adopted a more restrictive eligibility rule for employees to qualify for retiree health insurance benefits (the Rule of 75). As this revised rule was more restrictive than the previous one, it applied only to employees hired on or after July 12, 2010. Therefore, there are two sets of eligibility rules: one for employees hired prior to July 12, 2010, and another for those hired on or after that date. The attached policy reflects the revised Retiree Health Insurance Policy that will apply to employees hired on or after July 12, 2010. The revised policy, referred to as the “Rule of 62,” outlines the eligibility criteria for employees to be eligible for continuation health coverage upon retirement. To be eligible, employees have to be full-time employees, actively participating in the City’s health plan, who have attained a minimum age of 52, completed a minimum of 10 years of full-time credited service, and have resigned from City service in good standing.
Financial Information: Upon retirement, the former employee/retiree is responsible for one hundred percent (100%) of the cost of health insurance (both the employee and employer share). However, claims will continue to affect the overall plan until such time as the retiree comes off the City’s plan or reaches the age of Medicare eligibility, when Medicare becomes primary.
Special Consideration: N/A
Location of Project: N/A
Business Impact Statement: N/A
Attachments:
1. Resolution 25-R72;
2. Exhibit “A” to Resolution 25-R72 - Retiree Health Insurance Policy applicable to those hired on or after July 12, 2010 (Rule of 62)
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 25138-01
Legal Sufficiency Review:
Reviewed by Richard Berrios, City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.