2000-04-17 Special Called Workshop Meeting

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• • HISTORY OF RETIREE MEDICAL INSURANCE In 1993, Council asked staff to review the policy of covering retirees and their spouses on the Cii:y's medical plan. At that time the cost to the retiree was: Retiree Only $ 81.39 per month Retiree and Spouse $203.46 per month City Council made a policy decision that retirees' medical insurance should be paid by the City. 11: was pointed out that someone could work for another city for 23 years and comE3 to work for the City of La Porte for two years and "retire" with paid medical. Thi.~ was based on the 25 year any age option of the Texas Municipal RetiremE~nt System. The policy was revised, based on the number of years the employee worked for La Porte. Each year, an amount of money is budgeted for current employees and retirees, which is placed in 'the medical fund to pay claims. The amount for each employee has been static the past few years at $4,500. The adopted policy states that: Retirees with less than 10 years service with the City of La Porte are not eligible for coverage with the City, except for those provided by COBRA. Retirees with at least 10 years service with the City of La Porte, pay 20% of the annual amount, or $900. ($4,500 x 20% _ $900) Retirees with at feast 15 years service with the City of La Porte, pay 10°~ of the annu<~I amount, or $450. ($4,500 x 10% _ $450) Retirees with at feast 20 years service with the City of La Porte, pay nothing. In addition to any c,ption above, dependents are covered at a rate equal to the amount charged to~ current employees for dependent coverage. Child or children only $520 per year Spouse only $598 per year Family $676 per year In all options, retiree shall mean that an employee has met the requirements outlined in the Texas Municipal Retirement Act and is receiving a monthly annuity from TMRS. An employee who elects to take a lump sum distribution from TMRS, regardless of years of service with the City of La Porte, is not eligible for retiree medical coverage. That lump sum distribution is the entire amount the employee has conl:ributed and its accrued interest. None of the City's contribution is included in any lump sum.