1999-10-25 Regular Meeting and Workshop Meeting

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. . . September 28, 1999 1"Q ~ J(s-E>t'Llj ft e l-.. At/.... h -ef (('.J41 (7:~ RETIREE HEALTH INSURANCE OPTIONS e The following suggestion is a recommended starting point in developing a policy to present to City Council on retiree medical insurance. I believe the City should consider a two-tier approach. The fIrst tier is to provide a level of insurance that protects the employee who dedicates all or a majority of their useful work career with the City of La Porte. The second tier is to provide a similar level of protection to an employee who enters the work force and dedicates a minimum of 15 years of service to the City and meets the provisions of Texas Municipal Retirement Act as adopted by the City. In both cases, this benefIt is forfeited if the following occur: 1) If a retired employee obtains full-time employment after they retire from the City, they forfeit this benefit. The City has no obligation to continue retiree coverage in this event. 2) If the retiree works for an employer who offers health coverage, the City's health coverage will end automatically. TIER I This tier will utilize the concept of adopting a "point system" consisting of a combination of age and continuous years of service with the City of La Porte. In order to qualify under this level, the employee will need to have a minimum of 80 points. Example: New hire at 20 years of age - qualifIes at age 50 with 30 years of service New hire at 30 years of age - qualifIes at age 55 with 25 years of service New hire at 40 years of age - qualifIes at age 60 with 20 years of service The City of La Porte will pay 100% of the employee premiums in these examples. TIERll This tier will utilize the concept of years of service with the City of La Porte and meeting the requirements of the Texas Municipal Retirement Act. The intent here is to help a dedicated employee receive or procure medical insurance upon retirement, if they do not meet the eligibility requirements of the Tier I concept. Example: Years of Service Retiree Cost City Cost At least but less than: 15 years 20 years 20 years 25 years 25 years 30 years 30 years or more 60% 50% 25% o 40% 50% 75% 100% The above plan recommendations will need to be consistent with State Law as it pertains to Chapter 175.