1999-10-25 Regular Meeting and Workshop Meeting

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e e Keep in mind the spirit of all the laws relating to continued medical coverage are focused on the loss of coverage. In the case of a retiree who secures gainful employment after retirement, there is no loss of coverage. In active plans, for example, coverage usually follows the primary employer. Therefore, not only does the law allow for this criteria of coverage, it also closely follows an active employee eligibility model. 2. If the retiree works for an employer who offers health coverage, the City's health coverage will automatically end. Yes. The only exception might be an existing retiree who cannot secure his current employers coverage due to a late entrant underwriting requirement. In this case the City's retiree coverage may need to continue until the anniversary date of the active group plan. 3. The surviving spouse of a retiree will be allowed to continue with medical insurance if they pay a proportionate premium associated with dependent coverage. Yes. Dependent rates will carry actuarially sound premiums. Annual rates established for COBRA benefits are often a non-discriminatory guideline to follow for retiree dependent contributions. 4. Is there any benefit to the City or retiree if a Medicare supplement policy is available for purchase? If so who will purchase the supplement policy? No. My experience has shown the Medicare supplement plans do not benefit either the City or retiree. This is primarily due to two factors. F', Medicare Supplement Plans will not accept the under 65 retiree population. This group poses the largest claims exposure to your plan. Therefore, a carve-out or supplemental plan only benefits the insurance company. 2nd, If a retiree wishes to purchase a supplemental plan upon retirement, they can do so on an individual basis. 5. Our existing retiree workforce will probably fall into one of the tiers suggested. I believe that they need to be notified of the changes and how they may be affected, and be given a reasonable amount of time to make other provisions for coverage before the new rules go into effect. We will need to define reasonable. My definition of a reasonable time is one year. This time frame allows those retirees who made a lifestyle decision to cover themselves under the retiree plan, and who now must begin contributing toward the coverage, ample time to prepare for the contribution or make other coverage arrangements. 6. How would we handle an employee who gets injured on the job and can not full- fill their duties? Let's say that workers compensation recommends the employee no longer work, and the City due to a business necessity has to fill the position. Should the employee be allowed to fall into one of the recommended tiers? 2 The Welch COmpany