Agenda - Council - 06/25/2024 - Laserfiche WebLink

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NOTE 13 — OTHER POST -EMPLOYMENT BENEFITS (OPEB) PLAN A. Plan Description The City provides post -employment health care benefits for retired employees through a single employer defined benefit plan. The term plan refers to the City's requirement by State Statute to provide retirees with access to health insurance. The OPEB plan is administered by the City. All post -employment benefits are based on contractual agreements with employee groups. Eligibility for these benefits is based on years of service and/or minimum age requirements. These contractual agreements do not include any specific contribution or funding requirements. The plan does not issue a publicly available financial report. No plan assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. B. Benefits Provided All retirees of the City have the option under state law to continue their medical insurance coverage through the City from the time of retirement until the employee reaches the age of eligibility for Medicare. For members of all employee groups, the retiree must pay the full premium to continue coverage for medical and dental insurance. Per state statutes, the City is also required to contribute towards the cost of continued health insurance coverage for officers and firefighters disabled or killed in the line of duty. The City is legally required to include any retirees for whom it provides health insurance coverage in the same insurance pool as its active employees until the retiree reaches Medicare eligibility, whether the premiums are paid the by the City or the retiree. Consequently, participating retirees are considered to receive a secondary benefit known as an "implicit rate subsidy." This benefit relates to the assumption that the retiree is receiving a more favorable premium rate than they would otherwise be able to obtain if purchasing insurance on their own, due to being included in the same pool with the City's younger and statistically healthier active employees. C. Contributions The required contribution is based on projected pay-as-you-go financing requirements, with additional amounts to prefund benefits as determined periodically by the City. The City's current year required pay- as-you-go contributions to finance the benefits described in the previous section totaled $42,119. D. Membership Membership in the plan consisted of the following as of the latest actuarial valuation: Retirees and beneficiaries receiving benefits 4 Active plan members 94 Total members 98 E. Total OPEB Liability of the City The City's total OPEB liability of $794,822 as of year-end was measured as of December 31, 2022, and was determined by an actuarial valuation as of December 31, 2021. 91