HomeMy WebLinkAboutResolutions - 1994.10.27 - 24275MISCELLANEOUS RESOLUTION # 94292 October 13, 1994
BY: Personnel Committee, Marilynn Gosling, Chairperson
RE: RETIREMENT HEALTH CARE BENEFITS FOR NEW EMPLOYEES AND
EMPLOYEES TRANSFERRING FROM THE DEFINED BENEFIT TO DEFINED
CONTRIBUTION RETIREMENT PLAN
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS the escalation of health care costs have been
continuously monitored and assessed by the County, and
WHEREAS periodic adjustments may be necessary to sound fiscal
management of County resources,
WHEREAS retirement health care benefits for new employees have
not been adjusted since 1985, and
WHEREAS no changes were recommended in retirement health care
benefits concurrent with the recent change in the retirement for
new employees from a Defined Benefit Plan to a Defined Contribution
Plan, and
WHEREAS this administration feels it is prudent to address the
retirement health care issue for new employees in tandem with the
recent changes in the retirement plan, and
WHEREAS retirement health care benefits for new employees
should be adjusted to better reflect the marketplace and to further
contain costs while maintaining a reasonably competitive employee
compensation package, and
WHEREAS under current economic conditions it is reasonable to
expect employees to complete a minimum number of service years
before they are eligible for health care benefits on retirement,
and
WHEREAS current eligibility for retirement health care was
based on circumstances prior to 1985, and
WHEREAS the plan to allow employees currently in the Defined
Benefit Retirement Plan the option to transfer to the Defined
Contribution Retirement Plan recommends no loss of retirement
health care benefits such employees are currently entitled to,
NOW THEREFORE BE IT RESOLVED that employees hired or non-
vested former employees rehired on or after January 1, 1995 shall
be eligible for a basic health care benefit on retirement with
completion of no less than fifteen years of actual service with
Oakland County, as further described in this resolution and in the
attachments hereto.
BE IT FURTHER RESOLVED that on completion of fifteen years of
actual County service, employees hired on or after January 1, 1995
shall be credited with 60% of a County paid retiree health care
plan, credited at the rate of 4% each year for the first fifteen
years of employment, and shall accumulate 4% additional retirement
health care credit per annum with a maximum benefit of 100% of the
County paid portion of retirement health care on completion of
twenty-five (25) years of eligible County service, excluding
employee co-pays and deductibles, as described in Attachment B, and
BE IT FURTHER RESOLVED that employees hired on or after
January 1, 1995 shall pay the difference between the total health
care percentage points accumulated and 100% of the actual cost of
the retirement health care plan they are enrolled in, excluding co-
pays and deductibles, to be eligible for this benefit, and
BE IT FURTHER RESOLVED that employees who transfer from the
Defined Benefit Retirement Plan to the Defined Contribution
Retirement Plan shall retain the same retirement health care
coverage they would have received had they remained in the Defined
Benefit Retirement Plan, as described in the Attachment A, and
BE IT FURTHER RESOLVED that for employees hired on or after
January 1, 1995, health care benefits on retirement shall be
extended to an employee's eligible spouse in the same manner that
this benefit is extended to a spouse under retirement health care
provisions in effect prior to January 1, 1995.
Chairperson, I move the adoption of the foregoing resolution.
Attachment A
Retirement Health Care Plans
Contingent on date of hire:
Note: County paid Retirement Health Care coverage described below do not cover
employee deductibles or co-pays.
Employees/Retirees are responsible for their own deductibles and co-pays.
In each of the following plans the benefit does not take effect until the
employee/retiree has:
A. Attained age 60 with 8 or more years eligible County service, or
B. Attained age 55 with 25 or more years eligible County service.
I. Hired prior to September 21, 1985 (Regular and Deferred retirements):
A. Employees with less than 8 years eligible County service:
- no retirement health care coverage.
B. Employees with 8 or more years eligible County service:
- County paid Single Person or Family Health Care coverage
C. Defined Contribution Plan - Retirement health care covers the employee and
their spouse of record at the time of retirement, both for their lifetime. If the
retiree dies, the spouse will continue to receive health coverage as long as the
spouse was the spouse of record at the time of retirement and was covered by
the retiree's health plan at the time of the retiree's death. If the surviving
spouse were to remarry, the new spouse could not be added to the County
health care plan. A subsequent spouse of the retiree can be added to the
retiree's health plan but would not be eligible for health coverage upon the
retiree's death.
Dependent children of the retiree are eligible for continued health coverage
after the retiree's death if they were covered by the retiree's health plan at the
time of death and continue as dependents under the spouse who was the spouse
of record at the time of retirement, subject to the requirements of the health
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plan. In the case where a spouse of record is not named at the time of
retirement, but a dependent child is, the dependent child will be eligible for
continued health coverage upon the retiree's death through the end of the year
in which they have their 25th birthday, if they were covered by the retiree's
health plan at the time of death.
Children of the retiree whether natural, adopted, or for which the retiree is the
legal guardian or provides principal support who were not covered under the
retiree's health plan at the time of retirement may be added at a later date. A
surviving spouse may not subsequently add children to the health care
coverage.
Defined Benefit Plan - Retirement health care covers the retiree for the
retiree's lifetime. For all retirement options except for straight life, if the
retiree dies, the spouse will continue to receive health coverage as long as the
spouse is the named beneficiary, was covered by the retiree's health plan at the
time of death and continues to receive the retiree's retirement allowance. If the
surviving spouse were to remarry, the new spouse could not be added to the
County health care plan. A subsequent spouse of the retiree can be added to
the retiree's health plan but would not be eligible for health coverage upon the
retiree's death.
Dependent children of the retiree are eligible for continued health coverage
after the retiree's death if they were covered by the retiree's health plan at the
time of death and continue as dependents under the spouse who was the named
beneficiary of the retirement allowance subject to the requirements of the
health plan. In the case where a spouse is not a named beneficiary of the
retirement allowance but a dependent child is, the dependent child will be
eligible for continued health coverage upon the retiree's death through the end
of the year in which they have their 25th birthday, if they were covered by the
retiree's health plan at the time of death. At any point if the retirement
allowance ends, health coverage also ends.
Children of the retiree whether natural, adopted, or for which the retiree is the
legal guardian or provides principal support who were not covered under the
retiree's health plan at the time of retirement may be added at a later date. A
surviving spouse may not subsequently add children to the health care
coverage.
D. Retiree has a one-time option to purchase dental coverage under the County
group dental plan at group rates. Dental coverage terminates with non-payment
of group plan premium. Retiree cannot re-enter plan if terminated for non-
payment of premium or if they drop out of the plan. Deferred retirees are not
eligible for dental.
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II. Hired prior to January 1„ 1995 but on or after September 21, 1985:
A. Employees with less than 8 years eligible County service:
- no retirement health care coverage.
13. Employees with 8 through 14 years eligible County service:
- County paid Single Person Health Care coverage.
- Plus option to buy up to Family Health Care coverage.
C. Employees with 15 or more years eligible County service:
- County paid Single Person or Family Health Care coverage.
D. Deferred Retirements (hired after 9/21/85 but before 1/1/95):
- Less than 15 years eligible County service:
- No Retirement Health Care coverage.
- 15 through 19 years eligible County service:
- County paid Single Person Health Care coverage
- Plus - option to buy up to Family Health Care coverage
- 20 or more years eligible County service:
- County paid Family Health Care coverage
E. Defined Contribution Plan - Retirement health care covers the employee and
their spouse of record at the time of retirement, both for their lifetime. If the
retiree dies, the spouse will continue to receive health coverage as long as the
spouse was the spouse of record at the time of retirement and was covered by
the retiree's health plan at the time of the retiree's death. If the surviving
spouse were to remarry, the new spouse could not be added to the County
health care plan. A subsequent spouse of the retiree can be added to the
retiree's health plan but would not be eligible for health coverage upon the
retiree's death.
Dependent children of the retiree are eligible for continued health coverage
after the retiree's death if they were covered by the retiree's health plan at the
time of death and continue as dependents under the spouse who was the spouse
of record at the time of retirement, subject to the requirements of the health
plan. In the case where a spouse of record is not named at the time of
retirement, but a dependent child is, the dependent child will be eligible for
continued health coverage upon the retiree's death through the end of the y ear
in which they have their 25th birthday, if they were covered by the retiree's
health plan at the time of death.
cvl / 940927 2 8
Children of the retiree whether natural, adopted, or for which the retiree is the
legal guardian or provides principal support who were not covered under the
retiree's health plan at the time of retirement may be added at a later date. A
surviving spouse may not subsequently add children to the health care
coverage.
Defined Benefit Plan - Retirement health care covers the retiree for the
retiree's lifetime. For all retirement options except for straight life, if the
retiree dies, the spouse will continue to receive health coverage as long as the
spouse is the named beneficiary, was covered by the retiree's health plan at the
time of death and continues to receive the retiree's retirement allowance. If the
surviving spouse were to remarry, the new spouse could not be added to the
County health care plan. A subsequent spouse of the retiree can be added to
the retiree's health plan but would not be eligible for health coverage upon the
retiree's death.
Dependent children of the retiree are eligible for continued health coverage
after the retiree's death if they were covered by the retiree's health plan at the
time of death and continue as dependents under the spouse who was the named
beneficiary of the retirement allowance subject to the requirements of the
health plan. In the case where a spouse is not a named beneficiary of the
retirement allowance but a dependent child is, the dependent child will be
eligible for continued health coverage upon the retiree's death through the end
of the year in which they have their 25th birthday, if they were covered by the
retiree's health plan at the time of death. At any point if the retirement
allowance ends, health coverage also ends.
Children of the retiree whether natural, adopted, or for which the retiree is the
legal guardian or provides principal support who were not covered under the
retiree's health plan at the time of retirement may be added at a later date. A
surviving spouse may not subsequently add children to the health care
coverage.
F. Retiree has a one-time option to purchase dental coverage under the County
group dental plan at group rates. Dental coverage terminates with non-payment
of group plan premium. Retiree cannot re-enter plan if terminated for non-
payment of premium or if they drop out of the plan. Deferred retirees are not
eligible for dental.
cvl / 940927 2 9
cvl / 940927.2 1 0
. • '
HI. Hired on or after January 1.1995 (New Plan):
Employees awarded health care points based on eligible service as described in
Attachment B.
A. Employee awarded 60 health care points (60%) at the completion of their 15th
year of eligible County employment, reflecting retroactive credit at the rate of
4 points per eligible service year (15x4).
B. Employee continues to earn health care points at the rate of 4 points (4%) each
additional year through the completion of 25 years of County service.
C. Maximum health care points that can be earned equals 100 (25x4).
Total health care points equate to the amount, as expressed in percent, of the
County-paid portion of a Single Person or Family Retirement Health Care
Plan.
D. Employee/Retiree with a total health care point accumulation less than 100
(100%), must pay the difference between their total health care credits and
100% of their plan cost in order to receive this benefit. Failure to pay the
employees portion of plan costs within required time limits will result in
termination from retirement health care coverage. Once coverage is
terminated, it cannot be restarted later. In addition, you must begin coverage
when eligible as defined by the age and service requirements above. You
cannot activate the coverage later.
E. Service time, for which retirement health care points will be credited, shall be
determined on the same basis as time recognized by the Oakland County
Retirement System for employees in the Defined Benefit Retirement Plan.
F. Military service credit is excluded from the computation of health care points
for the purpose of retirement health care coverage. Military service applies only
toward retirement service credit under the Defined Benefit Retirement Plan.
G. Defined Contribution Plan - Retirement health care covers the employee and
their spouse of record at the time of retirement, both for their lifetime. If the
retiree dies, the spouse will continue to receive health coverage was long as the
spouse was the spouse of record at the time of retirement and was covered by
the retiree's health plan at the time of the retiree's death. If the surviving
spouse were to remarry, the new spouse could not be added to the County
health care plan. A subsequent spouse of the retiree can be added to the
retiree's health plan, but would not be eligible for health coverage upon the
retiree's death.
(Hired on or after January 1, 1995 (New Plan) Cont.
Dependent children of the retiree are eligible for continued health coverage
after the retiree's death if they were covered by the retiree's health plan at the
time of death and continue as dependents under the spouse who was the spouse
of record at the time of retirement, subject to the requirements of the health
plan. Children of the retiree whether natural, adopted or for which the retiree
is the legal guardian or provides principal support who were not covered under
the retiree's health plan at the time of retirement may be added at a later date.
A surviving spouse may not subsequently add children to the health care
coverage.
Part-time eligible employees shall be credited with County service and
retirement health care points on the same basis that time is recognized by the
Oakland County Retirement System for part-time eligible employees under the
Defined Benefit Retirement Plan. Such employees must meet the full-time
equivalent of the 15 year minimum requirement, as described above, before
retirement health care points will be credited to the employee.
Retiree has a one-time option to purchase dental coverage under the County
group dental plan at group rates. Dental coverage terminates with non-payment
of group plan premium. Retiree cannot re-enter plan if terminated for non-
payment of premium, or if they drop out of the plan. Deferred retirees are not
eligible for dental.
cvl / 940927 2 11
Attachment B
ACCUMULATION OF HEALTH CARE POINTS
-
Health Care Points or
At Completion Of: Percentage of Retiree
Paid Health Care Plan Earned*
Up to 15 Years 0% (No Coverage)
15 Years 60% (15 x 4)
A
16 Years 64% (16 x 4)
17 Years 68% (17 x 4)
18 Years 72% (18 x 4)
19 Years 76% (19 x 4)
20 Years 80% (20 x 4)
21 Years 84% ( 21 x 4)
22 Years 88% (22 x 4) ;
23 Years 92% (24 x 4)
24 Years 96% (24 x 4) .
25 Years and Remainder 100% (25 x 4)
Of County Service
*Excluding co-pays. This is the percentage the County would pay toward a Single person ,
or Family plan, depending on the plan the employee was enrolled in at the time of
retirement. The employee would be responsible for the difference between this amount
and the current full cost of their health care plan, plus any deductibles or co-pays.
12
October 27, 1994
FISCAL NOTE (Misc. #94292)
BY: FINANCE COMMITTEE, JOHN P. McCULLOCH, CHAIRPERSON
IN RE: RETIREMENT HEALTH CARE BENEFITS FOR NEW EMPLOYEES AND
EMPLOYEES TRANSFERRING FROM THE DEFINED BENEFIT TO DEFINED
CONTRIBUTION RETIREMENT PLAN
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XI-G of this Board, the Finance Committee
has reviewed Miscellaneous Resolution #94292 and finds that
funding is available in the retirement system reserves to cover
the proposed Retirement Health Care Benefits Plan for new
employees and employees transferring from the Defined Benefit to
the Defined Contribution Retirement Plan. No additional
appropriation is required.
(
FINANCf COMMITTEE
b:\retrhlth.fn
E THE FOREGn!"\T4 r'77-',)LUTION I HER
/JA/Iv
bks Patterson, County Executive Date
Resolution #94292 October 27, 1994
Moved by Gosling supported by Kingzett the resolution be adopted.
AYES: Law,
Pernick, Powers,
Gosling, Huntoon,
NAYS: None
McCulloch, McPherson, Moffitt, Newby, Oaks, Obrecht, Palmer,
Schmid, Taub, Wolf, Crake, Dingeldey, Douglas, Garfield,
Jensen, Johnson, Kaczmar, Kingzett, Kramer. (24)
. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the
foregoing resolution is a true and accurate copy of a resolution adopted by the
Oakland County Board of Commissioners on October 27, 1994 with the original
record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the
County of Oakland at Pontiac, Michigan this 27th day oOctobar_1994.
Lyng(D. Allen, County Clerk