HomeMy WebLinkAbout6.r. Health Care Savings Contribution (Management)CITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR ACTION
CITY COUNCIL MEETING DATE: DECEMBER 16, 2003
As part of the Minnesota Service Cooperatives VEBA Plan, additional funding into the Health Care Savings
Account must be made by the employer or by the employer on behalf of the employee. When making
- supplementary contributions into the plan it is mandatory that each employee group must uniformly follow
contribution rates. Employee groups within the City have been divided into the following units:
• Teamsters
• AFSCME
LELS- Police
• LELS- Sergeants
• Non- union management employees (those with pay equity points greater than 500 points)
• Non -union regular employees (those with pay equity points less than 500 points)
The employees of the management group have determined that they would like to contribute $15 per pay period
into their individual accounts in the Health Care Savings Plan. In addition to this, the employees would like to
contribute severance based on accumulated but unused Vacation Leave in excess of 80 hours and severance
based on accumulated but unused Sick Leave in excess of 40 hours (in accordance with the following table -- as
currently written in personnel policy.
I thru 5 yrs of service, 15% of accumulated sick leave
6 thru 10 yrs of service, 30 % of accumulated sick leave
11 thru 15 yrs of service, 45% of accumulated sick leave
16 yrs of service and above, 60% of accumulated sick leave
This policy also allows a cash -out option of allowable accrued time if notice is given two weeks before
termination. By doing this, an employee is not forced to deposit money into the Health Care Saving
Account when he /she may need it for other reasons.
RECOMMENDED ACTION: MOTION TO ACCEPT MANAGEMENT'S HEALTH CARE SAVINGS
PLAN DONATION SCHEDULE.
COUNCIL ACTION:
AGENDA ITEM: HEALTH CARE SAVINGS
AGENDA NO:
CONTRIBUTION (MANAGEMENT)
CONSENT
PREPARED BY: DAWN WEITZEL,
-2-1 6 R
HR/COMMUNICATIONS COORD.
ATTACHMENTS: HEALTH CARE SAVINGS PLAN
APPROVED BY:
POLICY
Policy: HEALTH CARE SAVINGS PLAN (MANAGEMENT)
Section:
Approved by: City. Council
Page: 1 of 2
Effective Date: January 1, 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 post - employment health related expenses, including health insurance
premiums using pre -tax dollars. Participation in the Health Care Savings Plan
(VEBA Account), administered by Blue Cross Blue Shield, is intended to
provide an opportunity to accomplish that goal.
Health Care
The Health Care Savings Plan is an Employer - sponsored
Savings Plan
program that allows eligible employees to:
defer payment of a portion of unused vacation and sick leave as a
severance payment at the time of termination to pay for eligible health
insurance premiums and /or health expenses after separation from City
service, and
• defer a portion of an Employees' bi- weekly salary for deposit into their'
Health Care Savings Plan for the payment of qualified healthcare related
expenses after separation from City service.
Eligibility to
Participation in the Health Care Savings Plan is mandatory for
Participate
all employees that meet the following requirements;
• The Employee must be a member of the Rosemount Management 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 Health Care Savings Plan shall be
Formula
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 Health Care Savings Plan. Such
contributions shall not exceed $15 per pay period (twenty -six pay periods).
Severance Contribution Severance shall be paid in cash for the first 80 hours
of accumulated but unused Vacation Leave._ Severance based on accumulated
but unused Vacation Leave in excess of 80 hours shall be paid as a credit to
the Employee's account in the Health Care Savings Plana
Severance shall be paid in cash for the first 40 hours of accumulated but
unused Sick Leave in accordance with the following table. Severance based on
accumulated but unused Sick Leave in excess of 40 hours shall be paid as a
credit to the Employee's account in the Health Care Savings Plan in
accordance with the following table.
1 thru 5 yrs of service, 15% of accumulated sick leave
6 thru 10 yrs of service, 30% of accumulated sick leave
11 thru 15 yrs of service, 45% of accumulated sick leave
16 yrs of service and above, 60% of accumulated sick leave
For those employees choosing to "cash - out" accrued leave time (in Lieu of credit
to their Health Care Savings Plan) advanced notice of at least two weeks must
be given to the Human Resources Coordinator. This cash -out option will only
cover accrued amounts over 80 hours in Vacation Leave and 40 hours in Sick
Leave.
Contributions authorized under this Plan shall continue until such time as this
policy is amended or repealed by the City of Rosemount.
Health Care The Health Care Savings Plan is authorized under the Internal Revenue
Savings Plan Code and is administered by Blue Cross Blue Shield:
Administration