Section 21. Hospitalization and Medical Care

1. The County pays seventy-five percent (75%) of the total premium for the County-offered group PPO plan (employees pay twenty-five percent (25%) of the total premium).

1. Upon the County’s request, the County and Association 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.

21.2 Retiree Medical Trust

Effective February 18, 2024, the Association will establish participation in the retiree medical expense reimbursement plan administered by the PORAC Retiree Medical Trust (“Trust”), 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 Trust is intended to constitute a “health reimbursement arrangement” within the meaning of IRS Notice 2002-45. All employees represented by the bargaining unit, including those who are not dues paying members of the DSA (LEU unit), are eligible and required to participate in the RMT.

The cost of establishing the Trust shall be at no cost to the County. The County is not a party to the Trust. Participation in the Trust shall be the complete and sole responsibility of the Association. Aside from transferring funds, the County has no obligations to the management, regulatory compliance or performance of the Trust. In the event the Trust becomes insolvent or unable to pay, the County has no financial obligation to the Trust, the employees covered by this Agreement, or the Association, including no obligation to provide a lifetime benefit to employees covered by this Agreement.

The Association agrees to defend, indemnify and hold the County, its agents, officers, and employees harmless from any liability of any nature which may arise as a result of employee participation in the PORAC RMT, including any and all claims or legal proceedings regarding the operation of the Trust, except for the obligation of the County to make and report employee and County contributions to the Trust as described in this MOU.

The monies contributed to the Trust on behalf of employees and retirees shall only be used for the sole purpose of providing funding for retiree health insurance premiums or reimbursement of retiree health care expenses, as permitted by law. The employee assumes full responsibility and liability for tax consequences related to contributions to and/or withdrawals from the PORAC Retiree Medical Trust. There shall be no employee election or option to take the contribution amount in cash. The Trust shall be and remain separate and apart from any of the County’s health insurance funding programs.

21.3 Retiree Medical Contributions:

The following contributions will be made to the Trust on behalf of employees:

1. County Contributions:

Effective February 18, 2024, for each full time employee hired on or after February 18, 2024, the County will contribute fifty dollars ($50) per month to the Trust, prorated for part time employees.

To receive and become vested in the County’s monthly Trust 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 Trust.  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 Trust, prorated for part time employees. Once vested in the County’s contributions to the Trust, 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.

County contributions to the Trust 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.

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 Trust 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 Trust.

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

2. Mandatory Employee Contributions: Three types of employee contributions will be made to the Trust, 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.

1. Regular Contribution: Effective February 18, 2024, each employee regardless ofhire date will contribute one hundred dollars ($100) per month to the employee’s Trust. An employee’s Trust contributions, including any allocable investment earnings, are 100% vested at all times.
2. Unused Vacation Accruals: For all employees regardless of hire date, at separation from County service, fifty percent (50%) of the employee’s earned and unused vacation will be cashed out and deposited into the employee’s Trust; except if the employee dies while in County employment, then vacation accruals will not be deposited into the employee’s Trust and will instead be converted to cash and distributed to the employee’s estate.
3. Converted Old Sick Leave for Employees Hired Before February 18, 2024. For employees hired before February 18, 2024, who retire on or after February 18, 2024 simultaneous with separation from County service, upon retirement from the County, contributions of “old” sick leave will be made to an eligible employee’s individual Trust account, subject to the terms and conditions specified in Section 21.4 of the MOU.

3. Distributions

After an employee separates from County employment, the employee’s Trust 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. Trust funds may not be used for any other purpose, including cash out or conversion to another plan.

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

The parties acknowledge that the Trust 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.

a. Employee Contribution: Effective on the transition date (“February 18, 2024”), all employees hired before February 18, 2024 will contribute eighty-five one-hundredths of a percent (0.85%) 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. These contributions are mandatory.

b. “Old Sick Leave” will be defined as sick leave earned before February 18, 2024. Old Sick Leave will cease to accrue as of February 18, 2024 (“transition date”). For employees hired by the County before February 18, 2024, old sick leave accrued and unused as of February 18, 2024, 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.

c. Employees hired before February 18, 2024will 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 February 18, 2024 who take long-term leave for which they are eligible to use sick leave, including FMLA, CFRA or disability (including pregnancy disability) leaves of absence on or after February 18, 2024, who exhaust their one hundred ninety-two (192) hours of Old Sick Leave hours, as well as their New Sick Leave accrued after February 18, 2024, will be permitted to use additional hours of Old Sick Leave upon request for sick leave purposes listed in this MOU.
2. Employees hired before February 18, 2024 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.

d. 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.

e. “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 Trust. The employee will not receive any Trust contributions or other benefit with respect to the forfeited amounts.

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 individual Trust account on a monthly basis. If the retiree passes away before the age of 65, the benefits payable to a surviving spouse will be ($250) 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 contributions will cease.

b. 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.

c. For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 21.4, subsection 3(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 individual Trust account.

d. For retirees not enrolled in County benefit plans, the County will deposit the contribution specified in Section 21.4, subsection 3(a) into the retiree’s individual Trust account on a monthly basis.

e. At the time of retirement, the County will deposit an amount into the retiree’s individual Trust account 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.

a. 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 individual Trust account 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.

b. 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.

c. The Medicare-eligible benefit will be payable for ten (10) years.

i. For retirees who retire prior to age 65, this benefit will first be payable at age 65 and continue for ten (10) years.

ii. For retirees who retire at or after age 65, the benefit will be payable for ten (10) years after retirement.

iii. 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.

d. Effective for retirees who retire on or after February 18, 2024, the County’s Medicare-eligible benefit contribution will be one hundred sixty-six dollars and twenty-two cents ($166.22). 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 2024 and 2026, and not to exceed an annual adjustment of 5% in 2027 and beyond.

e. 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.

f. For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 21.4, subsection 4(a) or 4(b-c) 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 individual Trust account.

For retirees not enrolled in County benefit plans, the County will deposit the contribution specified in Section 21.4, subsection 4(a) or 4(b-c) into the retiree’s individual Trust account on a monthly basis.

g. At the time of retirement, the County will deposit an amount into the retiree’s individual Trust account 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.

a. From the date of retirement until the retiree reaches the age of Medicare eligibility, the County will contribute one thousand three hundred dollars ($1,300) 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 $1,300 into the retiree’s individual Trust account on a monthly basis.  If the retiree passes away before the age of 65, the benefits payable to a surviving spouse will be six hundred fifty dollars ($650) 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.

b. When the retiree reaches the age of Medicare eligibility, the County will contribute an amount each month specified herein. 

i. 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.

c. The Medicare-eligible benefit will be payable for ten (10) years.

i. For retirees who retire prior to age 65, this benefit will first be payable at age 65 and continue for ten (10) years

ii. For retirees who retire at or after age 65, the benefit will be payable for ten (10) years after retirement.

iii. 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.

d. Effective for retirees who retire on or after February 18, 2024, the County’s Medicare-eligible benefit contribution will be one hundred sixty-six dollars and twenty-two cents ($166.22) 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 2024 and 2026, and not to exceed an annual adjustment of 5% in 2027 and beyond.

e. 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.

f. For retirees enrolled in County benefit plans, the County will contribute the contribution specified in Section 21.4, subsection 6(a) or 6(b-c) 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 individual Trust account.

For retirees not enrolled in County benefit plans, the County will deposit the contribution specified in Section 21.4, subsection 6(a) or 6(b-c) into the retiree’s individual Trust account on a monthly basis.

g. At the time of retirement, the County will deposit an amount into the retiree’s individual Trust account 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.