Section 16. Hospitalization and Medical Care
16.1. Medical Insurance:
Regular Employees Assigned to Work Eighty (80) Hours Per Pay Period:
The County pays eighty-five percent (85%) of the total premium for the County-offered group HMO and High Deductible Health plans (employees pay fifteen percent (15%) of the total premium).
For full time employees enrolled in the County-offered group High Deductible Health Plan, the County will annually contribute fifty percent (50%) of the cost of the deductible amount for the plan to a Health Savings Account.
The County pays seventy-five (75%) of the total premium for the County-offered group PPO plan (employees pay twenty-five percent (25%) of the total premium.
16.2. Regular Employees Assigned to Work Less Than Eighty (80) Hours Per Pay Period:
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 (1/2) of the County contribution to hospital and medical care premiums described above. Employees will pay the remainder of the total premium.
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 the hospital and medical care premiums described above. Employees will pay the remaining fifteen percent (15%) or twenty-five percent (25%), as applicable, of the total premium.
For part time employees working half time or more who are enrolled in the High Deductible Health Plan, the County will annually contribute a pro-rated amount of fifty percent (50%) of the cost of the deductible amount for the plan to a Health Savings Account, based on the employee’s part time status.
16.3. Healthcare Legislation Reopener:
Upon request from the County, the parties will reopen this Section 17 during the term of the agreement if necessary to address changes required under the ACA or other healthcare legislation. Upon the County or PDA’s request, the County and PDA shall reopen the issue of payment of any taxation assessed against employers in association with employer health insurance contributions, or other taxation resulting from future healthcare legislation.
16.4. Retiree Health Benefit:
A. Retiree Health Reimbursement Account
Effective January 8, 2023, the County will establish a Retiree Health Reimbursement Account (RHRA) for each 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.
1. Contributions
The following contributions will be made to each employee’s RHRA:
a. County Contributions:
Effective January 8, 2023, for employees hired on or after January 8, 2023, the County will contribute fifty dollars ($50) per month to each employee’s RHRA.
County contributions to the RHRA will be made only during periods for which the employee is receiving County compensation. For example, an employee on unpaid leave will not be entitled to such County contributions. In addition, the fifty dollar ($50) County contribution amount will apply to full-time employees; the contribution amounts for less-than-full-time employees will be pro-rated according to those employees’ work schedules.
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.
b. Mandatory Employee Contributions:
Two 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.
i. Regular Contribution: Effective January 8, 2023, all employees regardless of hire date will contribute fifty dollars ($50) per month to the employee’s RHRA. These contributions will be deducted from the employee’s County compensation. The contribution amounts specified in this paragraph will apply to full-time employees; contribution amounts for less-than-full-time employees will be pro-rated according to those employees’ work schedules.
ii. Converted Old Sick Leave for Employees Hired Before January 8, 2023. Upon retirement from County service, contributions of “old” sick leave will be made to an eligible employee’s RHRA subject to the terms and conditions specified below.
2. Vesting
An employee’s RHRA contributions, including any allocable investment earnings, are 100% vested at all times.
To become vested in the County’s RHRA contributions, an employee must complete five (5) years of continuous, full time (or full time equivalent), paid County employment in a regular position. 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. If an employee’s County employment terminates before completion of five (5) years of continuous County employment, all County contributions to the employee’s RHRA, including any allocable investment earnings, will be forfeited.
3. 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. RHRA funds may not be used for any other purpose.
In accordance with the federal tax laws, any RHRA benefits cannot be provided with respect to an RHRA participant’s registered domestic partner, and thus such payments must be made out of pocket.
Upon a participant’s death, any remaining funds in their RHRA may be used only for eligible medical expenses incurred by the employee’s surviving spouse, or eligible dependents. Any funds remaining in an RHRA after all such permitted uses are exhausted will be reallocated to other individuals’ RHRAs at the time and in the manner determined by the County.
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.
4. Fees and Forfeitures
a. Fees
i. Employees and retirees will be responsible for payment of RHRA basis point fees, mutual fund fees, and annual system charges.
ii. The County will be responsible for payment of the PCORI fees.
b. 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 (January 8, 2023). 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 January 8, 2023.
c. The County will provide an annual report of County-wide fees and forfeitures to the Deferred Compensation Committee.
B. “Old” Sick Leave Conversion for Employees hired Before January 8, 2023
The following terms apply to employees hired by the County before January 8, 2023:
1. Effective January 8, 2023, all employees hired before January 8, 2023 will contribute one-half percent (0.5%) of the employee’s base wage rate each pay period for the duration of their employment with the County, to the County to offset the costs of retiree medical benefits described herein. These contributions are mandatory.
2. “Old” sick leave will be defined as sick leave earned before January 8, 2023. Old Sick Leave will cease to accrue as of January 7, 2023 (“transition date”). For employees hired by the County before January 8, 2023, old sick leave accrued and unused as of January 7, 2023, 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.
3. Employees hired before January 8, 2023, 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.
a. Employees hired before January 8, 2023, who take long-term, FMLA, CFRA or disability (including pregnancy disability) leaves of absence on or after January 8, 2023, who exhaust their one hundred ninety-two (192) hours of Old Sick Leave hours, as well as their New Sick Leave accrued after January 8, 2023, will be permitted to use additional hours of Old Sick Leave upon request for sick leave purposes listed in this MOU.
b. Employees hired before January 8, 2023, 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.
4. 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.
5. “Severed by reason of retirement” is defined as an employee retiring and drawing pension benefits from SamCERA simultaneous with separation from the County employment.
Retirement from County service is defined as drawing SamCERA pension benefits via a service or disability retirement immediately upon separation from the County.
If an employee separates from County service without retiring and does not return to County service within twenty-eight (28) days or less, the employee will forfeit all converted “old” sick leave amounts listed in this section and will forfeit entitlement to all retiree health benefits described herein, except for vested contributions to the RHRA. The employee will not receive any RHRA contributions or other benefit with respect to the forfeited amounts.
6. For Employees Hired by the County Before January 8, 2023, with Less Than Fifteen (15) Years of Service Whose Employment with The County Is Severed by Reason of Retirement:
For employees hired prior to January 8, 2023, 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 continuous, full-time regular 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 the time of retirement on the following basis:
- For Tier 1 employees (defined as employees hired by the County prior to May 1, 2011), who retire from the County on or after January 8, 2023with less than fifteen (15) years of service with the County of San Mateo, the conversion rate for each eight (8) hours of accrued, unused, “old” sick leave will be four hundred forty dollars ($440.00).
For Tier 2 employees (defined as employees hired by the County between May 1, 2011 and January 7, 2023), who retire from the County on or after January 8, 2023, the conversion rate for each eight (8) hours of accrued unused “old” sick leave will be four hundred dollars ($400). No inflation factor and no conversion at a lower number of hours based on years of service.
The contribution will include conversion any of the remaining one hundred ninety-two (192) hours of “old” sick leave which was maintained in the employee’s sick leave bank to use as sick leave, and that remains unused at the time of retirement from County service.
7. For Employees Hired by The County Before January 8, 2023 Whose Employment with the County is Severed by Reason of Retirement, Who Retire with Between Fifteen (15) and Twenty Years of Service:
For an employee hired before January 8, 2023, who has between fifteen (15) and twenty (20) years of County service, and whose employment with the County is severed by reason of retirement:
a. From the date of retirement until the retiree reaches the age of Medicare eligibility, the County will contribute five hundred dollars ($500) 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 $500 into the retiree’s RHRA on a monthly basis.
i. If the retiree passes away before the age of 65, the benefits payable to a surviving spouse will be two hundred fifty dollars ($250) per month paid until the retiree would have reached the age of Medicare eligibility.
ii. 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.
b. When the retiree reaches the age of Medicare eligibility, the County contributions specified herein will cease.
c. 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 into 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.
d. For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 16.4, subsection B(7)(a) 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.
e. 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.
8. For Employees Hired By The County Before January 8, 2023 Whose Employment with the County is Severed by Reason of Retirement, Who Retire with Twenty or More Years Of Service:
For an employee hired before January 8, 2023, who has twenty (20) or more years of County service, and whose employment with the County is severed by reason of retirement:
a. From the date of retirement until the retiree reaches the age of Medicare eligibility, the County will contribute one thousand dollars ($1,000) 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 $1,000 into the retiree’s RHRA on a monthly basis.
i. If the retiree passes away before the age of 65, the benefits payable to a surviving spouse will be five hundred dollars ($500) per month paid until the retiree would have reached the age of Medicare eligibility.
ii. 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.
b. When the retiree reaches the age of Medicare eligibility, the County contributions specified herein will cease.
c. 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 into 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.
d. For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 16.4, subsection B(8)(a) 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.
e. 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.
9. Effective January 7, 2023, “old” sick leave with a conversion value to retiree health dollars will cease to accrue for all employees.
16.5. The surviving spouse of an active worker who dies may, if they elect a retirement allowance, convert the worker’s accrued sick leave to the above specified limits, providing that the worker was age fifty-five (55) or over with at least twenty (20) years of continuous service.