Retiree Health Care PolicySection Name: Human Resources Effective Date: June 2, 2008
Section Number: 400 Date of Revision: July 7, 2008
Policy Number: 002 Date of Revision: September 19, 2011
Page: 1 of 7
Subject: Retiree Health Care Benefits
1. Purpose: The purpose of this policy is to provide health care benefits to certain
Retirees commencing at the time of their retirement, if they are eligible to receive and
elect coverage under the policy and also receive monthly benefits under the City of
Monroe Employees' Retirement System (the “Retirement System”). This policy also
provides health care benefits to the Retiree’s current Spouse, as defined in this policy.
2. Statement of Policy:
2.1 Eligibility Requirements. To be eligible to receive health care benefits under
this policy, an individual must:
a) be a Retiree, or the eligible Spouse of a Retiree, who has enrolled
for benefits under this policy;
b) have been employed by the City in a regular full-time non-union
capacity on or before June 30, 2008;
c) timely pay all applicable monthly premiums under this policy; and
d) enroll and maintain his/her participation in Medicare Part B, upon
attainment of Social Security Normal Retirement Age, or have
been entitled to Social Security Disability Benefits for two years,
or have end-stage renal disease, whichever is earlier. (Note: The
Retiree and, where applicable, the Retiree's Spouse, shall be
responsible for all associated costs of Medicare Part B enrollment
and participation.)
Only a Retiree who retires from the City and immediately commences
receiving payments, or an employee who elects to participate in the deferred
retirement option plan (DROP), under the Retirement System and
simultaneously requests benefits to commence under this policy will be
eligible for benefits under this policy. A Retiree who does not elect
immediate commencement of benefits under the Retirement System and this
policy will not be eligible to commence benefits under this policy at a later
date.
2.2 Commencement of Participation. A Participant shall begin receiving benefits
under this policy on the first day he or she satisfies the eligibility requirements
set forth above, provided the individual has enrolled for coverage on such
date.
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2.3 Enrollment.
a) Enrollment Forms. A Retiree and Spouse may enroll for coverage
on a form or forms provided by and filed with the City. In
connection with his/her enrollment for coverage, a Retiree and
Spouse shall furnish all pertinent information requested by the
City, including but not limited to the names, relationships and birth
dates of the Retiree’s Spouse. The City may rely upon all such
forms and information furnished.
b) Spouses. The current Spouse of a Retiree shall be eligible for
coverage as provided under the terms of this policy. A Retiree who
remarries after the effective date of his or her retirement is not
permitted to add a new spouse for coverage under this policy. A
Spouse who is enrolled under this policy at the time of the
Retiree’s death may continue to participate in the health care
benefits provided under this policy as long as he or she continues
to receive the Retiree’s Survivor benefits under the Retirement
System. If a deceased Retiree’s current Spouse remarries, health
care benefits under this policy shall not be available to the new
spouse.
2.4 Termination Events. Except as provided in this policy, participation in the
health care benefits shall terminate in accordance with this policy on the
earliest of:
a) the termination of this policy;
b) a Participant’s non-payment of any required contributions to the City;
c) the death of the Participant;
d) the loss of Spouse Status; or
e) failure to enroll for and maintain Part B Medicare Benefits upon reaching
Social Security Normal Retirement Age, if the Participant is eligible for
such benefits.
2.5 Scheduled Benefits.
a) Except for the employees described in 2.5b below, the City shall provide
each regular full-time non-union employee hired on or before June 30,
2008, and who retires on or after July 1, 2008, and, if elected, the
Employee's eligible Spouse, the same health care benefits in retirement
that the City provides its active non-union employees until the Retiree
becomes eligible for Medicare.
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The City hereby expressly and unqualifiedly reserves the right to
change such benefits from time to time for the Retiree and his/her
Spouse, to reflect the changes in coverage the City provides its active
employees. Until the retiree, and his/her eligible spouse becomes
eligible for Medicare, the healthcare benefit plans to be provided under
this provision shall be the same as those the City provides its active
non-union employees. For each year of credited service 1 (up to a
maximum of 25 years credited service), the City will pay an amount
equal to 4% of its share of the illustrated premium cost of coverage of
the Plan selected by the retiree and, where applicable, his/her eligible
spouse.2 Retirees, and, where applicable, his/her eligible spouse shall
pay the remaining portion of all costs, if any, of the plan selected. The
retiree’s and, where applicable, spouse’s contributions, shall be made
through automatic withholding from their monthly pension benefits.
When the retiree and his/her spouse become eligible for Medicare Part
B benefits the City shall provide the retiree and his/her spouse Blue
Cross Supplement Plan benefits, which Plan shall have the same
prescription drug benefits the City thereafter provides its active non-
union employees.3 The City will pay the same percentage share of the
cost of such Blue Cross Supplemental and prescription drug benefits
for eligible retirees and spouses becoming entitled to Medicare.
Retirees shall pay the remaining portion of such costs, if any, through
automatic withholding from their monthly pension benefits. In the
event the retiree’s required contributions toward the premium exceeds
the retiree’s monthly pension benefits, the City will invoice the retiree
or his/her eligible spouse for the remaining balance of the necessary
payments. The City will terminate the retiree’s and/or spouse’s health
1 For the purposes of this provision, credited service shall be defined under the City of Monroe
Employees’ Retirement Ordinance.
2 For that period preceding eligibility for Medicare, the Employer's contribution, in combination
with any state or federal subsidy, on behalf of a retiree (including his/her eligible spouse) with 25 or more
years of service shall not be less than what it would have been required to contribute toward the
illustrated premium cost of coverage for the retiree and his/her eligible spouse, whatever may be
applicable, under the health care plan requiring the lowest Employer contribution at the time the retiree
commenced his/her retirement. The Employer's minimum contribution on behalf of retirees (including
their eligible spouse) with less than 25 years of credited service shall be determined by multiplying that
percentage of premium to which the retiree is entitled based upon his/her credited service by the
illustrated premium cost of coverage for the retiree and his/her eligible spouse, whatever may be
applicable, under the health care plan requiring the lowest Employer contribution at the time the retiree
commenced his/her retirement.
3 Retirees and/or his/her eligible spouses who do not meet the eligibility requirement for
Medicare benefits shall continue to receive the health care benefits for which they are otherwise eligible
under this policy.
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care benefits if the retiree or spouse fails to timely pay all applicable
monthly premiums within (30) days of the invoice due date. A
retiree’s or spouse’s failure to receive an invoice from the City does
not constitute just cause for not making timely payments.
Each Retiree shall annually provide the City’s Human Resources
Department a signed affidavit indicating whether or not he and his
Spouse is employed and/or receiving health care benefits through
another source. Retirees who fail to report such employment and/or
receipt of health care benefits from another source, or falsify such
affidavit, shall forfeit all health care benefits under this policy for
himself and his Spouse. To receive benefits under this policy, Retirees
and Spouses must cooperate in the coordination of coverage to limit
the City's expense.
In the event a Retiree obtains employment following his/her retirement
from the City and is provided health care benefits equal to or better
than those provided to the Retiree by the City through that
employment, the City shall not provide coverage while the Retiree is
so employed. Upon termination of subsequent employment, the
Retiree, after giving notice to the City, shall be eligible to have his
health care benefits reinstated.
Notwithstanding the foregoing, if the Retiree is employed long enough
to obtain retiree health benefits through another Employer and such
benefits are equal to or greater than those provided to the Retiree by
the City, the City shall have no further obligation to provide health
care benefits to the Retiree.
b) Non-union members of the Division of Public Safety or Police Department
or Fire Department, who were employed by the City prior to July 1, 2008,
and retire or enter the DROP program under the Retirement System prior
to January 1, 2012, shall be eligible to receive the same retiree health care
benefits under the same terms as those provided to members of the City of
Monroe Command Officers Association of Michigan or the Monroe
Firefighters Association in effect at that time.
2.6 Coordination of Benefits.
a) General Rule. The City intends that this policy shall provide each
Participant with payments toward eligible health care expenses incurred
by the Participant as a Retiree and, if eligible, the Retiree’s Spouse. The
City does not intend that payments made under this policy and any other
health care plan shall exceed the amount of the expenses incurred. For
this reason, this policy coordinates benefits with other health care plans in
accordance with applicable Michigan law.
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b) Reimbursement. If an expense is paid by the City on behalf of a Retiree or
a Retiree’s Spouse, and such expense subsequently is paid from any other
source, in whole or in part, the Retiree or Spouse shall remit to the City an
amount equal to the duplicated benefit. In addition, the City may
reimburse any other health care plan, person or entity that has paid an
expense on behalf of a Retiree or Spouse that is an expense payable under
this policy. In such event, the City shall be relieved of all further
responsibility with respect to that expense.
2.7 Employees Hired On or After July 1, 2008.
All employees hired on or after July 1, 2008, are excluded from retiree health
care coverage provided in Section 2.5 above.
2.8 Retiree Health Care Savings Program
All regular full-time non-union employees hired on or after July 1, 2008, are
excluded from retiree health care benefits provided in Section 2.5 above. In
lieu of said benefits, all regular full-time employees hired on or after July 1,
2008, shall participate in a Retiree Health Care Savings Program. All covered
employees and the City shall contribute to the Plan. Employees employed
from July 1 through June 30 of each year shall contribute 3% of the average
annualized base wages of all regular full-time employees of the City of
Monroe, which amount shall be calculated based upon the wages paid on June
30 of each year. (Note: Once this amount is determined it shall not later be
adjusted to account for changes in the workforce or compensation preceding
the next following June 30.) The employee's contribution shall be paid
through automatic payroll withholdings in 26 equal biweekly increments
during the 12 month period commencing July 1 extending through and
including the following June 30. The City shall contribute an equal amount to
the Plan on behalf of each employee concurrent with the employee's
contribution. Employees employed less than a full 12 month period extending
from July 1 - June 30 shall make prorated contributions. Such contributions
shall be payable during the period of their actual employment in biweekly
increments equal to 1/26th of the maximum amount subject to contribution by
individuals employed the entire 12 month period.
2.9 Retiree Health Care Fund. Effective January 1, 2013, non-union employees
hired on or before June 30, 2008, shall contribute 3% of the average
annualized base wages of all regular full-time employees of the City to the
City’s Retiree Health Care Fund, which amount shall be calculated based
upon the wages paid on June 30 of each year. (Note: Once this amount is
determined it shall not later be adjusted to account for changes in the
workforce or compensation preceding the next following June 30.) The
employee's contribution shall be paid through automatic payroll withholdings
in 26 equal biweekly increments during the 12 month period commencing
July 1 extending through and including the following June 30. If the employee
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quits or leaves City employment for any reason and is ineligible for retiree
health care benefits, the employee shall be refunded the amount he contributed
to the Retiree Health Care Fund. Interest will be credited in the same manner
as employee contributions to the pension fund.
3. Definitions:
a) “Employee” means a regular full-time, non-union employee of the
City of Monroe who was hired on or before June 30, 2008, and is
eligible to participate in the Retirement System. All other non-
union employees of the City of Monroe are not eligible to receive
benefits under this policy.
b) “Participant” means a Retiree or the Spouse of a Retiree covered
by this policy at the time of the Employee’s retirement.
c) "City" means the City of Monroe, Michigan.
d) “Retiree” means an individual who, on or after July 1, 2008,
enrolls for benefits under this policy, satisfies all eligibility
requirements for benefits under the policy, has retired from the
City, receives monthly retirement benefits from the Retirement
System and who, immediately before the individual became an
active retirant under the Retirement System, was contributing to
the Retirement System as an Employee.
e) “Spouse” means a Retiree’s spouse by legal marriage at the time
of the Employee’s retirement, and provided that the marriage status
exists at the time expenses for medical claims under this policy are
incurred. A Retiree who remarries after the effective date of his or
her retirement is not eligible to add a new spouse for coverage
under this policy. A Spouse who is covered under this policy at the
time of a Retiree’s death may continue to participate in the benefits
provided under this policy as long as the Spouse receives the
Retiree’s survivor payments under the Retirement System. If the
Spouse of a Retiree remarries after the Retiree’s Death, his or her
new spouse is not eligible to receive coverage under this policy.
f) "timely pay" means all applicable monthly premiums or retiree
contributions to the premiums under this policy must be paid
within thirty (30) days from the due date of the invoice.
4. Application: This policy shall supersede and cancel all prior policies and actions of
the City Council related to health care benefits for Retirees and their eligible Spouses
as defined above.
5. Responsibility: The Human Resources Director or designee shall be responsible for
implementing and overseeing this policy.
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6. Administrative Procedure: None
7. Legislative History of Authority for Creation or Revision:
Adopted pursuant to action of the Monroe City Council, dated June 2, 2008.
Revised pursuant to action of the Monroe City Council, dated July 7, 2008.
Revised pursuant to action of the Monroe City Council, dated September 19, 2011