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EB-6 Rev. 3 Administration of Retiree Group InsuranceCITY OF DELRAY BEACH ADMINISTRATIVE POLICIES AND PROCEDURES DEPARTMENT: SUBJECT: REVISION: APPROVED BY: Human Resources Administration of Retire Grou Insurance POLICY NUMBER:EB-6 SUPERSEDES:Rev.2 EFFECTIVE DATE: errence R.Moore,ICMA-C ,City Manager PURPOSE The purpose of this directive is to define a policy and procedure that allows for the continuation of insurance coverage on the City's Group Health and Life Insurance Programs for retirees from the City's pension plans and 457 Plan participant retirees that are not in the city pension plans. DEFINITION A 457 Plan participant that has opted out of the City's pension plans may qualify for the continuation of these benefits provided that certain conditions are met: A.The 457 Plan participant that is "retiring"must meet the following age and service criteria: •5 years service and age 60,or •15 years service and age 55,or •20 years service regardless of age B.The 457 Plan participant must submit a written intention to "retire"and C.The 457 Plan participant must elect to receive either monthly or quarterly payments from their deferred compensation account with such payments to begin with 90 days after announcement of the retirement intention. POLICY The following comprises the policy to be followed regarding a retiree's opportunity to retain Group Health and/or Group Life Insurance on City insurance policies which may be in effect.If the City changes insurance carriers,the retiree and his/her dependent will also be eligible for coverage under the new plan for the same benefits that apply to active full-time employees. A.Prior to an employee's retirement date,the decision must be made whether to continue coverage for health and/or life insurance.Failing to elect continuation of either or both insurances will result in termination of coverages. B.The opportunity to continue insurance coverage is a one-time election opportunity and,if rejected, will not be available in the future. C.Once in effect,insurance coverage can only be discontinued through a written request by the retiree or by non-payment of the monthly premium. Retiree Group Insurance EB-6 Rev.3 Page 2 of 3 D.Monthly premiums for retirees or dependents will be identical to those rates established periodically for active full-time employees and their dependents.If the sole dependent covered is a spouse,the individual employee rate shall apply to the spouse rather than the dependent rate. E.The monthly premium payments will be deducted from the pension checks of those retirees or dependents or beneficiaries of deceased retirees selecting such coverages,For 457 Plan "retirees" who do not receive monthly City pension plan checks,an alternate payment arrangement must be agreed to by the Finance Director or the Risk Manager in order for the retiree to make monthly premium payments. PROCEDURE -HEALTH INSURANCE An employee who has met or will soon meet,the requirements for retirement,should schedule an appointment with Benefits Manager to discuss options and make a selection.This should be done at least thirty (30)days prior to retirement. Availability of health insurance for retirees and dependents is as follows: A.Retiree under age 65 chooses to stay in Group Health Plan at point of retirement: •If retiree is under age 65 at time of retirement,retiree and dependents must stay in specific plan they chose at open enrollment as an active employee.A plan change cannot be made at this time. •A plan change can be made during any open enrollment similar to active employees as long as retiree remains under 65. B.Retiree chooses to leave Group Health Plan voluntarily prior to age 65: •Plan is no longer available to retiree or dependents. •Retiree and dependents cannot re-enter the plan. C.Retiree in Group Health Plan dies prior to age 65: •Current plan is available to dependent(s)until age 65. •Surviving spouse or single dependent must pay the single rate. •Additional dependents must pay the applicable dependent rate. •Once dependent reaches age 65,can continue on plan only as single rate PPO. D.Retiree stays in Group Health Plan at age 65: •Retiree and dependent(s)will stay in specific plan they chose at open enrollment as an active employee.A plan change cannot be made at this time. •A plan change can be made during any open enrollment similar to active employees as long as retiree remains under 65. E.Retiree leaves Group Health Plan at age 65: •Plan is no longer available to retiree. •Retiree cannot re-enter the plan. •Current plan is available to dependent(s)under age 65. •Spouse or single dependent must pay the single rate. •Additional dependents must pay the applicable dependent rate. Retiree Group Insurance EB-6 Rev.3 Page 3 of 3 •Once spouse or single dependent reaches 65,can continue only as a single rate for 36 months on COBRA PROCEDURE -HEALTH INSURANCE Life insurance can be continued by a retiree,or a 457 Plan participant qualifying for "retirement"by electing to retain coverage and paying the premium according to the following schedule: A.For a retiree who has not yet attained age 65,the coverage will be the same amount as that in force while an active,full-time employee. B.At the attained age of 65,the amount of life insurance able to be retained would amount to 65%of the original amount in Item A. C.At the attained age of 70,the amount of life insurance able to be retained amounts to 50%of the original amount in Item A.No further reductions will be made for ages over 70. D.Monthly premiums for coverage will also be paid through deductions from pension checks or,in the case of a 457 Plan "retiree"by an alternate payment arrangement agreed to by the Finance Director in the same manner as for health insurance premiums.