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<br /> <br />HRH@ <br /> <br />HUb Rogal & Hobbs <br />1155 Dairy Ashford, Suite 350 <br />P.O. Box 941709 (77094-8709) <br />Houston, Texas 77079-3012 <br />281-531-4455 <br />800-964-6564 <br /> <br />hilb rogal & hobbs <br /> <br />TO: <br /> <br />Debra Feazelle <br /> <br />FROM: <br /> <br />Neal W. Welch <br /> <br />DATE: <br /> <br />October 4, 2006 <br /> <br />RE: <br /> <br />Health Plan Projections <br /> <br />As requested by Council, we have enclosed what we understand to be the request to <br />freeze retiree rates at 2006 levels and reflect the shortfall in Active calculation. <br /> <br />Page 1 is the "blended" calculation (employees & retirees) that was provided to <br />Council on September 25th. This calculation reflects the original employer contribution <br />calculation plus 100% of the 2007 increase (15%) absorbed by the employer ($620.37). <br />The employee contribution remained the same as 2006. <br /> <br />Page 2 illustrates the 2006 Employer and Employee calculation for just the retiree <br />population. (Grandfathering existing retirees) <br /> <br />Page 3 illustrates 2007 Retiree calculation if there were two retiree rate schedules <br />(before and after 1/1/2007). These rates include all costs minus the active rate subsidy <br />for active participants. (Same level as blended) <br /> <br />Page 4 illustrates the shortfall/subsidy created by freezing the retiree and active rates. <br />The shortfall is described as a subsidy and must be absorbed by the employer or shared <br />in the future with actives and retirees. <br /> <br />Please feel free to call for any additional clarifications. <br /> <br />Attachments: <br /> <br />Premium Worksheets (1 - 4) <br /> <br />c:\documents and settings\swanaganr\local settings\temporary internet files\olkI48\memo debra feazelle 10-04-06 retiree subsidy calculations,doc <br />