Section 21. Hospitalization and Medical Care

21.1 Payment of Healthcare Premiums

The County and covered employees share in the cost of health care premiums. For full-time employees enrolled in County-offered health insurance plans, the County will pay eighty-five percent (85%) of the total premium for the Kaiser HMO, Blue Shield HMO, or Kaiser High Deductible Health Plans (employees pay fifteen percent (15%) of the total premium), and the County pays seventy-five percent (75%) of the total premium for the Blue Shield PPO Plan (employees pay twenty-five percent (25%) of the total premium).

For full-time employees enrolled in a County-offered High Deductible Health Plan, the County will contribute fifty percent (50%) of the deductible to the employee’s Health Savings Account over the course of the calendar year. Contributions will occur biweekly.

21.2 Part Time Employees

For County employees occupying permanent part-time positions, who work a minimum of forty (40), but less than sixty (60) hours in a biweekly pay period, the County will pay one-half (½) of the County contribution to hospital and medical care premiums described above for full-time employees.

For County employees occupying permanent part-time positions who work a minimum of sixty (60), but less than eighty (80) hours in a biweekly pay period, or qualify for health benefits under the Affordable Care Act (ACA), the County will pay eighty five percent (85%) of the County-offered group High Deductible Health Plan (HDHP) or three-fourths (3/4) of the County contribution to hospital and medical care premiums described above. For County employees occupying permanent part-time positions who work a minimum of sixty (60), but less than eighty (80) hours in a biweekly pay period who are enrolled in a County-offered High Deductible Health Plan, the County will contribute fifty percent (50%) of the deductible to the employee’s Health Savings Account over the course of the calendar year. Contributions will occur biweekly.

21.3 Healthcare Legislation Reopener

Upon request from the County or the Union, the parties will reopen Section 21 during the term of the agreement if necessary to address changes required under the ACA or other healthcare legislation.

21.4 Retiree Health Reimbursement Account

Effective June 12, 2022, the County will establish a Retiree Health Reimbursement Account (RHRA) for each active employee, to which the County and employees contribute to save, on a nontaxable basis, money to help pay the cost of eligible medical expenses after terminating from County employment. The RHRA is intended to constitute a “health reimbursement arrangement” within the meaning of IRS Notice 2002-45.

A. Contributions

The following contributions will be made to each employee’s RHRA:

County Contributions for Employees Hired On or After June 12, 2022:

Effective June 12, 2022, the County will contribute fifty dollars ($50) per month to the RHRA for each full time employee hired on or after June 12, 2022, prorated for part time employees.

To receive and become vested in the County’s monthly RHRA contributions, an employee must complete five (5) years of continuous, paid County employment in a regular position. During an employee’s initial five (5) years of employment with the County, the County will not contribute to the employee’s RHRA. Upon successful completion of five (5) years of regular employment with the County, the County will contribute a lump sum of three thousand dollars ($3,000) (the equivalent of $50 per month for five years of service), prorated for part time employees. Each month thereafter, the County will deposit fifty dollars ($50) per month to the full time employee’s RHRA, prorated for part time employees. Once vested in the County’s contributions to the RHRA, if the employee separates from County service prior to attaining benefit eligibility, the employee and County contributions in the account will remain in the individual’s name and will be invested as directed by the individual.

A break in service of twenty-eight (28) days or more will result in the exclusion of prior service in calculation of the employee’s RHRA vesting service requirement. An approved leave of absence, including FMLA/CFRA, disability, and pregnancy disability leave, will not constitute a break in service for the purpose of this section.

If an employee’s County employment terminates before completion of five (5) years of continuous County employment, the employee will not receive County contributions to the employee’s RHRA.

Upon an employee’s separation from employment with the County, the County will cease contributions to that individual’s RHRA. Employees will have no vested right in ongoing County contributions to the RHRA; the contributions may be increased, decreased or frozen at any time in accordance with future MOU’s.

Mandatory Employee Contributions: Three types of employee contributions will be made to the RHRA, as specified below. These employee contributions are mandatory. No employee will have any right to elect to receive cash or any benefit in lieu of the contributions.
Regular Contribution: Effective June 12, 2022, each employee hired on or after June 12, 2022 will contribute fifty dollars ($50) per month to the employee’s RHRA. An employee’s RHRA contributions, including any allocable investment earnings, are 100% vested at all times.
Unused CTO and Vacation Accruals: For all employees regardless of hire date, at separation from County service, a percentage of the employee’s earned and unused Compensatory Time Off, and a percentage of the employee’s earned and unused vacation will be cashed out and deposited into the employee’s RHRA; except if the employee dies while in County employment, then CTO and vacation accruals will not be deposited into the employee’s RHRA and will instead be converted to cash and distributed to the employee’s estate. The Union will advise the County by May 2, 2022 what uniform percentages, if any, of CTO and vacation will be cashed into the RHRA at separation for employees in the bargaining unit.
Converted Old Sick Leave for Employees Hired Before June 12, 2022. For employees hired before June 12, 2022, who retire on or after June 12, 2022 simultaneous with separation from County service, upon retirement from the County, contributions of “old” sick leave will be made to an eligible employee’s RHRA subject to the terms and conditions specified in Section 21.5 of the MOU.

B. Distributions

After an employee separates from County employment, the employee’s RHRA funds may be used for any eligible medical expenses incurred by the employee, the employee’s spouse, or the employee’s eligible dependents. “Eligible medical expenses” are expenses described in section 213(d) of the Internal Revenue Code, as amended from time to time, including but not limited to, qualifying insurance premiums, deductibles, co-pays, prescription drugs, eyeglasses & contact lenses, dental care, medical equipment costs and other qualifying expenses. RHRA funds may not be used for any other purpose, including cash out or conversion to another plan.

In addition, the use of the RHRA funds will be subject to the terms of the governing RHRA plan document.

The parties acknowledge that the RHRA plan will be subject to non-discrimination testing. Non-compliance with non-discrimination rules may result in taxation of discriminatory coverage. In the event of taxation of discriminatory coverage, the parties will reevaluate and negotiate changes to the plan design to comply with non-discrimination rules.

C. Fees and Forfeitures

Fees
1. Employees and retirees will be responsible for payment of RHRA basis point fees, mutual fund fees, and annual system charges.
1. The County will be responsible for payment of the PCORI fees.
Forfeitures: Plan forfeitures will first be allocated to the County to cover the cost of future PCORI fees as well as those dating back to the transition date (June 12, 2022). Remaining forfeitures will be allocated among qualifying participants in the plan. Qualifying participants include existing employees with five (5) or more continuous years of County service in a regular position, and retirees with RHRA plans established on or after June 12, 2022.
The County will provide an annual report of County-wide fees and forfeitures to the Deferred Compensation Committee.

21.5 “Old” Sick Leave Conversion to Health Coverage Upon Retirement and Retiree Health Benefit for Employees Hired by the County Before June 12, 2022

The following terms apply only to employees hired by the County before June 12, 2022:
1. Employee Contribution: Effective on the transition date (“June 12, 2022”), all employees hired before the June 12, 2022 will contribute seven-tenths of a percent (0.7%) of the employee’s base wage rate each pay period for the duration of their employment with the County, to the County to contribute to the cost of the retiree health benefit described herein.
1. “Old Sick Leave” will be defined as sick leave earned before June 12, 2022. Old Sick Leave will cease to accrue as of June 12, 2022 (“transition date”). For employees hired by the County before June 12, 2022, old sick leave accrued and unused as of June 12, 2022, with the exception of one hundred ninety two (192) hours, will be removed from the employee’s sick leave bank. A record of the number of frozen hours of old sick leave will be kept on file with the County, pending the employee’s retirement from County service.
1. Employees hired before June 12, 2022 will retain up to one hundred ninety-two (192) hours of accrued, unused Old Sick Leave in their sick leave bank to use as needed.
  1. Employees hired before June 12, 2022 who take long-term, FMLA, CFRA or disability (including pregnancy disability) leaves of absence on or after June 12, 2022, who exhaust their one hundred ninety-two (192) hours of Old Sick Leave hours, as well as their New Sick Leave accrued after June 12, 2022, will be permitted to use additional hours of Old Sick Leave upon request for sick leave purposes listed in this MOU.
  1. Employees hired before June 12, 2022 who have less than one hundred ninety-two (192) hours of accrued, unused Old Sick Leave in their sick leave bank will retain remaining Old Sick Leave in their sick leave bank to use as needed.
1. A break in service of twenty-eight (28) days or more will result in the exclusion of prior service in the calculation of hire date and service time for the purpose of this section.
1. “Severed by reason of retirement” is defined as an employee retiring and drawing pension benefits from SamCERA simultaneous with separation from the County employment.
For Employees Hired Before June 12, 2022, With Less Than Fifteen (15) Years Of Service, Whose Employment With The County Is Severed By Reason Of Retirement:
1. For employees hired prior to June 12, 2022 whose employment with the County is severed by reason of retirement during the term of this MOU, and who have less than fifteen (15) years of service at retirement, the County will contribute to the retiree’s RHRA in the amount of the employee’s unused, frozen, old sick leave at time of retirement on the following basis:
For employees hired prior to January 1, 2011, for each eight (8) hours of unused, frozen, old sick leave at time of retirement (including any remaining, unused hours from the 192 hours of old sick leave left in the employee’s sick leave bank as of the transition date), the County shall contribute four hundred forty dollars ($440).
For employees hired on or after January 1, 2011 and before June 12, 2022, for each eight (8) hours of unused, frozen, old sick leave at time of retirement, the County shall contribute four hundred dollars ($400).
For Employees Hired Before June 12, 2022, Whose Employment With The County Is Severed By Reason Of Retirement, Who Retire With Fifteen (15) or More and Less than Twenty (20) Years Of Service:

For an employee hired before June 12, 2022, who has fifteen (15) or more and less than twenty (20) years of County service, and whose employment with the County is severed by reason of retirement:

From the date of retirement until the retiree reaches the age of Medicare eligibility, the County will contribute eight hundred and ninety-one dollars and ninety-five cents ($891.95) per month to the retiree for the purchase of medical, dental and vision insurance through the County health plans. For retirees not enrolled in County benefit plans, the County will deposit the $891.95 into the retiree’s RHRA on a monthly basis. If the retiree passes away before the age of 65, the benefits payable to a surviving spouse will be four hundred forty-five dollars and ninety-seven cents ($445.97) per month paid until the retiree would have reached the age of Medicare eligibility. Retirees who retire at or after age 65 (the age of Medicare eligibility) will not be eligible to receive any portion of the pre-65 benefit.
When the retiree reaches the age of Medicare eligibility, the County will contribute an amount each month specified herein.
1. For married retirees, the Medicare-eligible benefit will be double the single premiums specified herein. As with the pre-Medicare-eligible benefits, the County’s payments will be based on the retiree’s Medicare eligibility only, with this benefit payable while the retiree is age 65 and older. The spouse’s age will not influence the amount of the County’s maximum payment.
The Medicare-eligible benefit will be payable for ten (10) years.
1. For retirees who retire prior to age 65, this benefit will first be payable at age 65 and continue for ten (10) years.
1. For retirees who retire at or after age 65, the benefit will be payable for ten (10) years after retirement.
1. If the retiree dies before the ten (10) year period expires, a surviving spouse will receive the Medicare-eligible benefit for one (1) person for the remaining period of time until the ten (10) year period would have expired for the retiree.
Effective for retirees who retire on or after June 12, 2022, the County’s Medicare-eligible benefit contribution will be one hundred fifty seven dollars and eleven cents ($157.11). The County’s Medicare-eligible contribution will be adjusted each year in accordance with adjustments made by the Centers for Medicare and Medicaid Services to the retiree cost of Medicare Part B, not to exceed an annual adjustment of 5.8% between 2023 and 2026, and not to exceed an annual adjustment of 5% in 2027 and beyond.
Following retirement, retirees and dependents will have only one opportunity to enroll in County medical, dental and vision insurance plans. If the retiree and/or their dependents opt out of any of the above benefits following enrollment, the individual will not have an opportunity to opt back in to County medical, dental and vision insurance plans at a later date. Nothing in this section prohibits a retiree from using the benefit(s) and amounts outlined above towards a market-based plan (non-county plan) should the retiree elect to do so, either at the time of retirement, or at a later date.
For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 21.5, subsection C(1) or C(2) toward the benefit premiums for the County medical, dental and vision benefits elected by the retiree and qualified dependents. If the cost of the premium(s) is greater than the County’s contribution, the retiree will be required to pay the difference through an automatic ACH bank withdrawal. If the cost of the premium(s) is less than the County’s contribution, the County will deposit the difference in the retiree’s RHRA.

For retirees not enrolled in County benefit plans, the County will deposit the contribution specified in Section 21.5, subsection C(1) or C(2) into the retiree’s RHRA on a monthly basis.

At the time of retirement, the County will deposit an amount into the retiree’s RHRA equal to fifty percent (50%) of the unused, frozen Old Sick Leave hours (plus fifty percent (50%) of any remaining, unused hours from the 192 hours of old sick leave left in the employee’s sick leave bank as of the transition date), multiplied by the rate of employee’s base hourly wage.
For Employees Hired Before June 12, 2022, Whose Employment With The County Is Severed By Reason Of Retirement, Who Retire With Twenty (20) or More Years Of Service:

For an employee hired before June 12, 2022, who twenty (20) or more years of County service, and whose employment with the County is severed by reason of retirement:

From the date of retirement until the retiree reaches the age of Medicare eligibility, the County will contribute one thousand one hundred eighty-nine dollars and twenty-seven cents ($1,189.27) per month to the retiree for the purchase of medical, dental and vision insurance through the County health plans. For retirees not enrolled in County benefit plans, the County will deposit the $1,189.27 into the retiree’s RHRA on a monthly basis. If the retiree passes away before the age of 65, the benefits payable to a surviving spouse will be five hundred ninety-four dollars and sixty-three cents ($594.63) per month, paid until the retiree would have reached the age of Medicare eligibility. Retirees who retire at or after age 65 (the age of Medicare eligibility) will not be eligible to receive any portion of the pre-65 benefit.
When the retiree reaches the age of Medicare eligibility, the County will contribute an amount each month specified herein.
1. For married retirees, the Medicare-eligible benefit will be double the single premiums specified herein. As with the pre-Medicare-eligible benefits, the County’s payments will be based on the retiree’s Medicare eligibility only, with this benefit payable while the retiree is age 65 and older. The spouse’s age will not influence the amount of the County’s maximum payment.
The Medicare-eligible benefit will be payable for ten (10) years.
1. For retirees who retire prior to age 65, this benefit will first be payable at age 65 and continue for ten (10) years.
1. For retirees who retire at or after age 65, the benefit will be payable for ten (10) years after retirement.
1. If the retiree dies before the ten (10) year period expires, a surviving spouse will receive the Medicare-eligible benefit for one (1) person for the remaining period of time until the ten (10) year period would have expired for the retiree.
Effective for retirees who retire on or after June 12, 2022, the County’s Medicare-eligible benefit contribution will be one hundred fifty-seven dollars and eleven cents ($157.11) per month. The County’s Medicare-eligible contribution will be adjusted each year in accordance with adjustments made by the Centers for Medicare and Medicaid Services to the retiree cost of Medicare Part B, not to exceed an annual adjustment of 5.8% between 2023 and 2026, and not to exceed an annual adjustment of 5% in 2027 and beyond.
Following retirement, retirees and dependents will have only one opportunity to enroll in County medical, dental and vision insurance plans. If the retiree and/or their dependents opt out of any of the above benefits following enrollment, the individual will not have an opportunity to opt back in to County medical, dental and vision insurance plans at a later date. Nothing in this section prohibits a retiree from using the benefit(s) and amounts outlined above towards a market-based plan (non-county plan) should the retiree elect to do so, either at the time of retirement, or at a later date.
For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 21.5, subsection D(1) or D(2) toward the benefit premiums for the County medical, dental and vision benefits elected by the retiree and qualified dependents. If the cost of the premium(s) is greater than the County’s contribution, the retiree will be required to pay the difference through an automatic ACH bank withdrawal. If the cost of the premium(s) is less than the County’s contribution, the County will deposit the difference in the retiree’s RHRA.

For retirees not enrolled in County benefit plans, the County will deposit the contribution specified in Section 21.5, subsection D(1) or D(2) into the retiree’s RHRA on a monthly basis.

At the time of retirement, the County will deposit an amount into the retiree’s RHRA equal to fifty percent (50%) of the unused, frozen Old Sick Leave hours (plus fifty percent (50%) of any remaining, unused hours from the 192 hours of old sick leave left in the employee’s sick leave bank as of the transition date), multiplied by the rate of employee’s base hourly wage.
Funds for conversion of frozen “Old Sick Leave” remain in the County’s possession until and if the employee’s employment with the County is severed by reason of retirement. While in the County’s possession, the County maintains the right to continue to earn interest on the funds.
Employees who separate from the County without simultaneously retiring forfeit their “old sick leave” and “new sick leave” upon separation.

21.6 Sick Leave Conversion – Survivor Benefit

The surviving spouse of an active employee who dies may, if they elect a retirement allowance, convert the employee’s accrued and unused old, frozen sick leave (including any unused amount from the 192 hours) to the above specified limits providing that the employee was age 55 or over with at least twenty years (20) of continuous service. “Spouse” means, unless otherwise specifically defined in the Adoption Agreement, an individual who is legally married to a Participant (and who is treated as a spouse as recognized to be legally married) as provided in applicable IRS regulations.

21.7 Taxation

The County shall continue its practice of calculating employee contributions for health and dental premiums on a pre‑tax basis consistent with Section 125 of the IRS Code.

21.8 Dependent Grandchildren

Effective October 20, 1996 grandchildren of custodial grandparents will be eligible dependents on all health, dental, and vision plans, whether or not formal adoption has occurred. This eligibility is contingent on documentation which is acceptable to the Health Plan.

21.9 Deferred Compensation Automatic Enrollment For New Employees

Subject to applicable federal regulations, the County agrees to provide a deferred compensation plan that allows employees to defer compensation on a pre-tax basis through payroll deduction. Each new employee hired after January 1, 2016 will be automatically enrolled in the County’s Deferred Compensation program, at the rate of one percent (1%) of their pre-tax wages, unless they choose to opt out or to voluntarily change deferrals to greater than or less than the default one percent (>1%) as allowed in the plan or as allowed by law. The pre-tax deduction will be invested in the target fund associated with the employees’ date of birth. All deferrals are fully vested at the time of deferrals; there will be no waiting periods for vesting rights.

AFSCME: 21. Hospitalization and Medical Care