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6.2.C. - Page 1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />October 24, 2011 <br />SUBJECT <br />Vantagecare Retirement Health Savings Plan (RHS) administered by ICMA Retirement <br />Corporation's Retiree Welfare Benefits Plan for members of the Chief Officer's <br />Association (COA) <br />RECOMMENDATION <br />Approve a resolution amending the existing IAFF VantageCare Retirement Health <br />Savings (RHS) Plan administered by ICMA Retirement Corporation to establish a <br />Retiree Welfare Benefits Plan that includes members of the Chief Officer's Association <br />(COA) and authorize the City Manager to execute the adoption agreement. <br />BACKGROUND <br />In May 2011, Council approved a resolution to extend a Retirement Health Savings <br />(RHS) Plan for the International Association of Fire Fighters (IAFF) Local 2400. In <br />doing so, it also adopted the Vantage Care Retirement Health Savings (RHS) Plan <br />administered by ICMA Retirement Corporation. Also in May 2011, Council adopted a <br />Memorandum of Understanding between the City and the Chief Officers' Association <br />(COA). During negotiations, it was agreed that the City would meet and confer after <br />negotiations to explore a Retirement Health Savings account, similar to the one offered <br />to IAFF. The RHS plan offers the members of the COA a Retirement Health Savings <br />account that upon separation from City service, employees may designate unused <br />vacation, compensatory time, and /or sick leave payoffs to be deposited into a <br />Retirement Health Savings (RHS) account subject to any applicable legal limitations. In <br />September, the City's negotiators and COA mutually agreed to amend its RHS Plan to <br />include members of the COA. <br />ANALYSIS <br />The VantageCare Retirement Health Savings (RHS) plan is regulated under IRS Code <br />213 and is designed to allow employees and /or the City to set aside pre -tax money for <br />payment of post employment qualified medical expenses that will be incurred after an <br />employee separates from service. The plan will cover the Retiree, Spouse or <br />Dependents reimbursements for Eligible Medical and Dental out -of- pocket expenses <br />such as prescription drugs, doctor co -pays and eyeglasses. The plan will be funded by <br />a reduction in the employee's salary through payroll deductions or with the employee's <br />