2006-06-07 Special Called Regular Meeting of the La Porte City Council

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City Council Special Called Regular Meeting - June 7, 2006 Page 6 The rest is supporting documentation from 2005 and it's there for your review if you would like to see it. Mr. Welch noted two other things. Years ago, a decision was made to start eligibility for retirees. A retiree had to elect or sayan active individual who is eligible to retire if they wanted to take the coverage, they had to elect the coverage at the point when they retired and participate in our plan as long as they paid premium. In hind sight, these many years later, we know that we have lots of folks are able to very hard for the City and earn their retirement and can retire at a relatively young age. And very often they go to work at another institution...a plant, a machine shop, etc.) If the City is forcing retirees to elect that coverage at the point of retirement, would we be better served by saying Mr. And Mrs. Retiree you don't have to take that retiree coverage at this point but you retain your eligibility to take it some point in time in the future when you need it. Not to say you can jump in and jump out willy nilly but if I'm a retiree and I'm, give me an age 55, would that be reasonable, 55 years old and I've still got some juice left in the box and I want to continue to work maybe I want to work until I'm 65. If! have to elect this coverage at this point, doesn't the retiree in the form of contribution and the City in the form of contribution aren't they subsidizing the other employer who now doesn't have to offer coverage to that individual. The retiree may have to pay some premium for our retiree which would be an act of somewhere else would have to pay some premium as well. A retiree if they go to work somewhere else is not eligible for coverage. Would it be wiser to change the eligibility requirement to say you only get to elect it once but it doesn't necessarily have to be when you first retire. So in that particular case, if Neil at age 55 goes to work at the ABC company and they offer my major medical plan, of course at my age 55, they make a contribution, the ABC company, I make a contribution if it's a contributory plan and I work there for 5 years until I, age 60 for instance then would I be better off saying ok I'm really going to retire now period...I want to join the plan. It seems we're supporting somebody else's health plan where Neil works for that period of time because that employer is getting off scott - free without having to provide the coverage to the employee. I submit that you think about that for a little bit and again GASB in mind. It doesn't mean that we still wouldn't be responsible for Neil at some point in time and in our actuarial projection we might have to say hey Neil is coming back at age 60. We have no idea when he's going to come back but he might not. But if we have this 63%... 163% of an active rate under the age 65, it would seem to me that we would be best served by reducing the number of people in that category as long as we could. That doesn't mean that Neil then decides to go get another job and says now I'm out and then at 65 I want to come back in I'm not proposing that we do this more than once but they have this "open enrollment period" one time once they leave active duty and would become a retiree. In light ofGASB that that might be something to consider. A critical point of that could be we would be allowing someone get the guy back when they are real sick and needs the coverage. The offsetting argument is they're closer to age 65 anyway or 65. The City offers extremely good healthcare coverage but it's not necessarily any better than what corporate America would offer but then for the individual that says I'm going to retire and be my own and work doing my own thing and I want the coverage so be it just like always. Council questioned whether or not we had a flex account and could offer a stipend to those who do not take the city coverage. Council suggested we may need to look at is when a new person is hired they could pay a different rate and look at various options to solve the health care issue Neal Welch noted the wonderful thing about a self funded plan is you basically within the confines of the federal law, have the flexibility to do pretty much what you want to do. You're not being dictated to buy an insurance company or whatever and whether it's