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Health Care Policy 1 Section Name: Human Resources Effective Date: June 2, 2008 Section Number: 400 Date of Revision: 7/7/08, 12/19/11, 2/21/12 Policy Number: 001 Page: 1 of 6 Subject: Health Care Benefits 1. Purpose: The purpose of this policy is to provide health care benefits for all regular full-time non-union employees, regular full-time Appointed Officials, and regular full-time Elected Officials of the City of Monroe. 2. Statement of Policy: 2.1. Regular full-time non-union employees, regular full-time Appointed Officials, and regular full-time Elected Officials shall be entitled to the following health care benefits commencing on their 91st day of continuous employment A. Employees Hired Prior to December 19, 2011. Subject to the provisions of Section 2.1 B below, effective January 1, 2012, each regular full- time employee hired prior to December 19, 2011, who desires health care benefits through the Employer shall have his choice of coverage under one of the following plans: (1) A Blue Cross/Blue Shield of Michigan Community Blue (90/10) PP0 Plan, (See Attachment 1), and Rx generic mandate $10 co-pay, brand name $60 co-pay; and mandatory purchase of all maintenance drugs through mail order with Rx generic mandate $20 co-pay and brand name $120 co-pay. Employees may select coverage for employee, employee and spouse, employee and child(ren), or family. 1 (2) A Blue Cross/Blue Shield of Michigan Community Blue (80/20) PP0 Plan, (See Attachment 2) and Rx generic mandate $10 co-pay, brand name $60 co-pay; and mandatory purchase of all maintenance drugs through mail order with Rx generic mandate $20 co-pay, and brand name $120 co-pay. Employees may select coverage for employee, employee and spouse, employee and child(ren), or family.1 (3) A Blue Cross/Blue Shield of Michigan Flexible Blue PP0 High Deductible Health Care Plan with a Health Savings Account and Rx generic mandate $10 co-pay and brand name $60 co- pay after the annual deductible has been met; and mandatory purchase of all maintenance drugs through mail order Rx generic mandate $20 co-pay and brand name $120 co-pay after 1 Eligible participants include the employee, the employee’s legal spouse, and the employee’s unmarried children to age 26 if they meet the requirements as defined and provided for in the respective plan documents. 2 the annual deductible has been met. This Plan shall include a $2,000 individual and a $4,000 family in-network deductible and a $4,000 individual, $8,000 family out-of-network deductible. (See Attachment 3) Except as above provided, after payment of the applicable in- network deductible in each calendar year, the Plan shall cover 100% of all eligible in-network expenses for the balance of that calendar year. Except as above provided, after payment of the applicable out-of-network deductible in each calendar year, the Plan shall cover 80% of all eligible out-of-network expenses for the balance of that calendar year. Unless modified pursuant to the provisions of Section 2.1 B below, for employees covered under this Plan during the period January 1, 2012 – December 31, 2014, the Employer shall pay the illustrated premium cost of the health plan and make a contribution to the employee’s HSA in an annual amount of $350 for those who select employee only coverage, $800 for employee/spouse or employee/child(ren) coverage, and $1,000 for family coverage.2 Employees may make contributions to their Health Savings Accounts on a bi-weekly basis, through automatic payroll withholding, in accordance with the provisions of the Internal Revenue Code and the related regulations, and the Employer's administrative procedures. Notwithstanding the foregoing, employees commencing their employment with the Employer after January 1 of any calendar year shall receive prorated contributions to their Health Savings Account in their first calendar year of employment. Such proration shall be based upon the number of days between the employee's date of hire and December 31 of the first calendar year of employment divided by 365. B. Employer Health Care Contributions. The Employer’s contribution to the coverage’s described in Sections 2.1 A(1), (2) and (3) above shall not exceed the total cost it is permitted to incur under Section 3 of the Publicly Funded Health Insurance Contribution Act, Act. No. 152 of the Michigan Public Acts of 2011 (the “Act”). The Employer will annually compare the total cost it is allowed to incur according to the Act to its actual cost if each employee were to select the plan in Section 2.1 A (3) above. If the actual cost exceeds the allowed cost, the Employer’s total cost will be adjusted to comply with the Act by first reducing the employer’s contribution to the HSA referred to in Section 2.1 A (3) until they are eliminated and then, if necessary, adding an employee payment for the cost of the 2 Eligible participants include the employee, the employee's legal spouse, and the employee's unmarried children to age 26 if they meet the requirements as defined and provided for in the respective plan documents. 3 plan in Section 2.1 A (3) until the calculation is brought into compliance with Section 3 of the Act. The employee’s payment for the plans in Sections 2.1 A (1) and (2) will be adjusted to make the Employer’s net cost match the cost for the plan in Section 2.1 A (3) above. C. Employees Hired On Or After December 19, 2011. Each regular full- time employee hired on or after December 19, 2011, who desires health care benefits through the Employer shall be provided the Blue Cross/Blue Shield of Michigan Community Blue PP0 (80/20) Plan described in Section 2.1 A (2) above or the Blue Cross/Blue Shield of Michigan Community Blue Flexible Blue PP0 High Deductible Health Care Plan with a Health Savings Account as described in Section 2.1 A (3) above. The terms and conditions applicable to these plans shall be as described in Section 2.1 (A) (2) and (3) above, with the following exceptions: 1) those employees choosing the PP0 (80/20) Plan described in Section 2.1 A (2) shall be required to pay 20% of the illustrated premium cost of such Plan or the cost calculated in Section 2.1 B, whichever results in the greater employee payment; and 2) those employees choosing the Flexible Blue PP0 High Deductible Health Care Plan with a Health Savings Account described in Section 2.1 A (3) shall be required to pay the full amount of the annual deductible and any amount by which the annual premium exceeds the Employer’s total cost as calculated in Section 2.1 B. (The Employer shall not contribute to the employee’s HSA.) The illustrated premium costs of the foregoing plans are subject to adjustment each calendar year (typically in January of each year). Prior to implementing each such adjustment, the Employer will inform employees of the adjustment and provide an open enrollment period during which time employees will be permitted to change their coverage selections. Eligibility for the medical benefits herein above provided shall be conditioned on the employee authorizing the Employer to deduct the covered employee’s portion of the cost of such benefits from compensation due the covered employee. 2.2 Spousal Coverage Limitations. Notwithstanding any other provision of this policy to the contrary, if a regular full-time, non-union employee’s spouse works for an employer, other than the City of Monroe, who provides medical coverage, such spouse shall be required to elect employee only medical coverage through his/her employer, so long as the spouse’s monthly contribution to the premium does not exceed one-third (1/3) of the total premium cost of employee only coverage. In such circumstance, the City’s Plan shall provide secondary coverage. If the spouse’s contribution exceeds one-third (1/3) of the total cost of 4 employee only coverage, the spouse will not be required to participate in his/her employer’s plan, in which event the City will provide primary coverage. 2.3 Health Care Waiver Incentives. A. Total Waiver of Health Care Coverage (1) Regular full-time, non-union employees who have health care benefits provided through a source other than the City of Monroe may waive their rights to health care benefits provided by the City under this policy. An employee who expressly waives, in writing, all rights to any health care benefits provided through the City of Monroe, including health care benefits provided through a spouse employed by the City, will receive a cash payment (not to be added to base salary) of $1,250 per year, payable in December of each calendar year. Any employee who has waived coverage for a period less than a full calendar year shall receive a prorated amount of such $1,250 payment. (2) An employee who has waived coverage as hereinabove provided may have such coverage reinstated, provided he/she demonstrates that he/she can no longer receive such benefits from another source. B. Waiver of Coverage for Employee’s Spouse or Spouse and Dependent Children Only (1) Any regular full-time, non-union employee whose spouse and eligible dependent children can secure health care coverage from a source other than the City of Monroe may waive all coverage for said spouse and and/or dependent children. (2) An employee who waives all health care coverage for only his/her spouse will receive a cash payment of $750 per year, payable in December of each calendar year. Any employee who has waived coverage under this provision less than a full calendar year shall receive a prorated amount of such $750 payment. (3) An employee who has waived all coverage for his/her spouse and all dependent children will receive a cash payment of $1,000 per year, payable in December of each calendar year. Any employee who has waived coverage under this provision less than a full calendar year shall receive a prorated amount of such $1,000 payment. 5 (4) An employee who has waived health care benefits coverage under the City’s plan for his spouse, or spouse and dependent children, may apply to have such benefits reinstated, provided he/she demonstrates that his or her spouse, or spouse and dependent children, can no longer receive such benefits from another source. 2.4 Coverage under the above plans is subject to the terms, conditions, exclusions, limitations, deductibles, illustrated premium co-payments and other provisions of such plans, and all applicable provisions of the Internal Revenue Code and related regulations. 2.5 To be eligible for health care benefits, an employee must document all coverage provided under his/her spouse’s medical plan and cooperate in the coordination of coverage to limit the City’s expense. 2.6 The City reserves the right to change its third party administrator and/or the carrier(s), plan(s), and/or the manner in which it provides the above benefits. 3. Definitions: None. 4. Application: This policy shall apply to all regular full-time non-union employees, regular full-time Appointed Officials and regular full-time Elected Officials in all departments of the City of Monroe and shall supersede and cancel all prior policies and actions of the City Council related to health care benefits for active employees, their spouses and eligible dependents. 5. Responsibility: The Human Resources Director or designee shall have the responsibility of implementing and overseeing the administration of this policy. 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 December 19, 2011. Revised pursuant to action of the Monroe City Council dated February 21, 2012.