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Employee Benefit Trust Minutes - 09/10/2008 / h CITY OF WICHITA FALLS EMPLOYEE BENEFITS TRUST BOARD MEETING September 10, 2008 Present: Bill Sullivan,Chair Dacron Leiker, City Manager Jim Dockery, Asst. City Manager/CEO Tammy Guerra, Human Resource Manager Gail Garmon, Employee Benefits Coordinator The meeting was called to order at 10:00 am Agenda Items: Approval of Minutes Darron Leiker made a motion to accept the minutes of the last meeting. Jim Dockery seconded the motion. Motion carried. Discussion on adding dependents to health coverage after retirement A retired employee had requested that he be allowed to add his spouse to his City of Wichita Falls health and dental coverage at the next open enrollment. He based his request on the fact that at the time he retired, he was under the impression that he would be allowed to do so, but was later told that he could not. A conference call was made to Cassie Stennett, broker for the Trust. Cassie stated that since there is no plan document supporting the idea that retirees will not be allowed to add any dependents to their coverage after retirement, we should allow such additions during the coming open enrollment period. In the meantime, information should be forwarded to Blue Cross so that they can produce a separate plan document which would outline all rules regarding coverage upon retirement. Cassie stated that if the spouse of a retiree is eligible for coverage elsewhere, but chooses to be on our plan, it is possible to charge a surcharge in addition to the regular premium. She will contact Blue Cross to compile the retiree plan document for the boards review and adoption. Bill Sullivan cited Chapter 175 of the Texas Government Code as appearing to say that you can exclude dependents from future coverage. Cassie will research Chapter 175. The retiree and his spouse were present for the meeting and were told that they would be notified of the board's decision by mail. Discussion on whether to cover weight loss surgery After two requests from employees, the question of whether or not the plan should cover weight loss surgery had been discussed at a previous meeting. It was decided that more information would be gathered and that Cassie Stennett would be consulted on the matter 3 during the conference call. Cassie stated that since the City is self funded, the option of whether or not to allow coverage for this surgery is our option. However, she noted that the majority of self funded groups have dropped this coverage from their plans. Darron Leiker inquired as to the possibility of setting caps, should the board elect to include this coverage to the plan. Cassie said that any caps should also include expenses for complications to the surgery should they occur. The conference call ended. Darron stated that he sees no proof that the procedure would save the plan anything and he would not be in favor of covering the procedure at this time, but would not be opposed to looking at it again in the future. Tammy Guerra was in favor of finding out if other plans had saved any expenses due to covering this procedure. Jim Dockery made a motion not to cover weight loss surgery at this time. Tammy Guerra seconded the motion. Motion carried. Regarding the adding of dependents after retirement, it was decided that the retiree should be notified by letter that the boards' decision was to let him add his spouse during the coming open enrollment. Darron Leiker stated that there were probably others who would also want to enroll at this time and that we would need to notify all retirees of their options during open enrollment. He added that as of January 1, 2009, no dependent should allowed to be added to the plan. Those being added now would do so at full premium. Tammy noted that future retirees should be given written notice that they cannot add any dependents after their retirement date. Jim Dockery made a motion to allow the adding of this particular dependent at open enrollment, to be effective January 1, at the January 1 modified premium. We would wait for the actuary figures to determine the premiums for other additions. Darron Leiker seconded the motion. Motion carried. A conference call was then placed to Mr. Jack Beam, with the actuary firm of Gabriel, Roeder, Smith & Company. Jim Dockery explained to Mr. Beam the plan changes to be presented to Council with regard to current and future retirees and/or spouses in an effort to reduce the City's liability with regard to GASB. It has been proposed that the City give $250 subsidy assistance to current retirees and/or their spouses who are already receiving Medicare benefits or will become Medicare eligible prior to January 1, 2009. All current retirees who become Medicare eligible after January 1, 2009, will receive $100 subsidy assistance. Their spouses may remain on the coverage but will receive no subsidy upon becoming Medicare eligible. Any employee retiring after January 1, 2009 will be allowed to remain on the City's coverage until they become Medicare eligible. At that time, they will have no Medicare plan with the City. The same is true for their spouses; they may remain on the plan until they are Medicare eligible. Jim Dockery asked Mr. Beam about funding the liability. Mr. Beam stated that it is possible to wait to fund, but the expense must still be recognized from October 1, 2008. Jim asked about the legality of offering no Medicare supplemental coverage to future retiring employees when they turn 65. Mr. Beam stated that it is not mandatory that you offer it. He further stated that offering it in the future, would not affect the liability, if the retiree were required to pay the entire cost. Jim then asked if it was permissible to do away with the dependent coverage at the same time a retiree turns 65 and no longer has coverage with our plan. Mr. Beam stated that he believed their calculations determining the City's liability were based on that scenario. Jim asked him to check that and let him know. Summary: Actuary will do a revised study which gives the retiree and/or spouse currently on Medicare the $250 subsidy; current retiree spouses who become Medicare eligible after January 1, 2009 remain on plan but at full cost; current retirees becoming Medicare eligible after January 1, 2009, $100 subsidy assistance and will pay rest of premium(whatever it is determined to be). Conference call ended. Financial Statement Jim Dockery presented a brief financial statement stating that he expects the year to end with expenses being between $29,000 and$211,000 more than projected revenue. The shortage would need to be pulled from the plans reserve funds. The meeting was adjourned at 12 Noon.