HomeMy WebLinkAbout6.o. VEBA Post Retirement Health Care Funding Plan (All Non-Union)f CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: JANUARY 20, 2004
AGENDA ITEM: VEBA/POST RETIREMENT HEALTH
AGENDA NO:
CARE FUNDING PLAN (ALL NON- -
CONSENT
UNION)
PREPARED BY: DAWN WEITZEL,
6 0
HR/COMMUNICATIONS COORD.
ATTACHMENTS: HEALTH CARE SAVINGS PLAN
APPROVED BY:
POLICY
Z- 7 1
The policy regarding contributions to the VEBA account (health care savings plan) needed to be
modified. While our Blue Cross Blue Shield representative was more flexible in her interpretation of
the IRS regulations, the Blue Cross legal team took a much more conservative approach. There are
two changes that have been made to the prior policy approved by Council:
• Instead of breaking the non -union employees up into groups the non -union employees are in
one group (this may be separated by tenure in the future).
• There could not be an opt -out provision in the severance portion to the policy (an employee is
not allowed to cash out accrued leave before leaving according to the laws of "constructive
receipt ").
As such, the non -union employees voted on January 9 on the structure of a new VEBA contribution
policy. The resulting policy is attached.
RECOMMENDED ACTION: MOTION TO ACCEPT THE NON - UNION'S VEBA/POST
RETIREMENT HEALTH CARE FUNDING PLAN POLICY.
COUNCIL ACTION:
Policy: VEBA/POST RETIREMENT HEALTH CARE FUNDING PLAN
(NON -UNION REGULAR EMPLOYEE)
Section:
Approved by: City Council
Page: 1 of 2
Effective Date: January 20, 2004
Plan Purpose The City of Rosemount is interested in establishing a means for eligible
employees to participate in a mandatory program to help defray some of the
costs of current year or post - employment health related expenses by using pre-
tax dollars. Participation in the VEBA/Post Retirement Health Care Funding
Plan, administered by Blue Cross Blue Shield, is intended to provide an
opportunity to accomplish that goal.
Health Care The VEBA/Post Retirement Health Care Funding Plan is an Employer -
Savings Plan sponsored program that allows eligible employees to defer a portion their bi-
weekly salary for deposit into a VEBA account. This money can only be used
for the payment of qualified healthcare related expenses during or after
separation from City service.
Eligibility to Participation in the VEBA/Post Retirement Health Care Funding Plan is
Participate mandatory for all employees that meet the following requirements:
• The Employee must be a member of the Rosemount Non -Union Pay
Classification Plan at the time of termination of employment, and
• The Employee must have been continuously employed by the City of
Rosemount for at least three (3) consecutive months.
Contribution Mandatory participation in the VEBA/Post Retirement Health Care Funding
Formula Plan shall be in accordance with, and limited to the following formulas for
contributions:
Bi- weekly Contribution An eligible Employee must contribute $15 per pay
period to the Employee's account in the VEBA/Post Retirement Health Care
Funding Plan. Such contributions shall not exceed $15 per pay period (twenty -
six pay periods). Contributions authorized under this Plan shall continue until
such time as this policy is amended or repealed by the City of Rosemount.
VEBA/ The VEBA/Post Retirement Health Care Funding Plan is authorized under the
Post Internal Revenue Code and is administered by Blue Cross Blue Shield.
Retirement Health
Care Funding
Account
Administration