Since 2007, the County has been addressing the issue of the Other Post Employment Benefit (OPEB) unfunded liability. This has been accomplished in a variety of ways including placing monies in reserve and creating an OPEB trust. The most significant impact to reduce this liability was the implementation of the County retiree medical premium contribution caps. At this time, all employee bargaining units have negotiated caps to retiree medical premiums and are either implemented or in the implementation phase. Elected Officials are the last remaining unit to have their entire retiree medical premium paid by the County. The Board Ad Hoc of Supervisors Provenza and Rexroad have been reviewing the benefits provided to Elected Officials and are recommending the Board approve placing a cap on retiree medical premiums in the same amount as Appointed Department Heads (currently $340/month) as well as eliminating the $60/month County-paid employee social security contribution for Board of Supervisor Members.
The Ad Hoc recommends the cap be implemented in January 2019 in order to allow notice to all newly elected officials. A resolution will need to be approved prior to that date implementing this change. This change will only apply to individuals elected to office from 2016 forward.
The fixed cap will not apply to individuals who retired prior to January 10, 2019 nor to any elected official who has continuously held that same elected position since June 2016 and who ultimately retires from Yolo County at any time in the future. These individuals will be considered “grandfathered retirees”. This will change the way in which the County can pay the retiree medical premium. Only the maximum medical contribution cap amount established in the resolution can be paid directly to CalPERS. In order to grandfather in current elected officials and maintain an uncapped level of County medical contribution, the Human Resources Department will establish a health reimbursement arrangement (HRA) plan to reimburse grandfathered retirees for the County contribution amount that will be deducted from their retirement check. The retiree HRA plan will continue the uncapped County contribution for each level of coverage specific to the current retiree health plan enrollment for the County contribution amount that can no longer be paid directly to CalPERS.
Staff recommends the Board approve Attachment A to authorize the County to switch from paying the County health plan contribution directly to CalPERS and establish the procedure for implementing a Retiree HRA Plan to reimburse elected retirees for the County medical premium contribution amount over the CalPERS medical contribution cap beginning in January 2019.
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