HEALTH INSURANCE FOR RETIREES

 

 

1.0 ORDINANCE PROVISIONS

 

Section 14-59.1 says: 

 

      Employees who retire with the Town under the Local Government Employees' Retirement System may continue health insurance for themselves under the Town's group policy. The Town will pay the premium for the coverage (whether on group coverage or Medicare supplement) based on the years of Town service of the retired employee:

 

         Retiree with Town Service:                       Individual Health Insurance Premium:

         At Least              Not More than:                     Town Pays:            Employee Pays:

 

         5 years                 10 years                               25%                      75%

         10 years               15 years                               50%                      50%

         15 years               20 years                               75%%                   25%

         20 years                                                          100%                     0%

 

      Such employees may elect to purchase health insurance coverage for their families, and will pay the full cost of this dependent coverage. In the event of the death of a retired employee, the spouse may elect to contin­ue group coverage by paying the full cost of this coverage; we have no time limit. Other covered dependents may continue coverage for 36 months.

 

2.0  POLICIES AND PROCEDURES

 

2.1   Payment amounts for full-time and part-time employees:

 

 

2.2  Eligibility

     

a.   Employees must retire under the Local Governmental Employees' Retirement System, and draw or currently be eligible to draw benefits from the System in order to qualify for payment of all or part of the health insurance premium.  Retirement System regulations on eligibility for retirement govern eligibility for the Town program. (Current regulations set age 50 with 20 years of service as the lower limit for retirement, unless employees are either 60 years of age with at least 5 years of service, or are a police or fire uniformed employee at age 55 with 5 years of service, or meet Retirement System regulations cover­ing  disability  retirement.  Therefore,  for most  employees, retirement at age 50 with 20 years of Retirement System creditable service is required in order to continue participation as a retiree in the Town's group insurance policy.)

 

b.   Once the employee meets the criteria for retirement described in item a, service with the Town, not total creditable service with the Retirement System will govern which level of payment the retired employee will be eligible for. For example, a full time employee retiring with 25 years of creditable service in the Retirement System but only 11 years of Town service would have 50% of the individual health insur­ance premium paid based on 10-plus years of Town service .

 

c.   At age 65, the retired employee or the dependent must switch from regular coverage to Medicare Supplement coverage. Several different Medicare Supplement policies are available. It is the retiree’s responsibility to apply for Medicare Parts A and B, so he or she is eligible for a Medicare Supplement policy.

 

      2.3 Election of Coverage

 

a.   Retiring employees must decide within 60 days after their retirement if they wish to continue Town health insurance coverage. After a deci­sion has been made not to continue coverage, coverage cannot be reinstated at some future date.

 

b.   Selection of carriers and addition of dependents to coverage will follow rules established by the insurance carrier. Retired employees will be eligible to change companies each year during the annual enrollment period. If the retiree moves out of the area covered by our HMO’s and must pick up other insurance, the Town will contribute the same percentage as if it were our insurance, with the following limitation:


If the insurance carried by the retiree is more expensive that the most expensive health insurance covered for active employees, the Town will pay up to what would be the cost if the retiree carried our most expensive active employee health insurance.  In other words, the Town will cover 100% of the cost of our most expensive health insurance (if covered 100% for active full time employees) for a 20 year retiree. But, if the supplemental or other insurance plan chosen by the retiree is more costly, the retiree must pay the difference.

 

      2.4 Payment of Premium

 

a.      Payment of the premium for coverage on dependents or for the portion of the retired employee’s coverage not paid by the Town must be made by the end of the month prior to the coverage. That is, payments for July coverage should be received by the end of June.

b.      Payments may be made monthly or quarterly, and may be sent or brought to the Revenue Collector or Payroll Staff in the Finance Department. Monthly statements will be sent out indicating rates and any balances owing.

c.      Failure to pay the required premium may result in loss of coverage; once coverage has been discontinued, it cannot be reinstated. However there is an appeal process before coverage is discontinued (see below).

 

2.5  Appeal Process (See also attached RETIREE HEALTH INSURANCE APPEAL PROCESS)

 

a.      The Finance Department will notify a retiree of possible discontinuation of coverage when the bill is 30 days overdue. This balance must be paid within 30 days. If the retiree believes this is an error, or if there are extenuating circumstances or hardships -

 

(1)  the retiree may call Finance Department payroll staff and arrange for payment, either at once or over a period of time, within 15 days of receiving the bill

 

(2)  if the retiree believes there has been an error, it is the retiree’s responsibility to follow up in person or in writing with Finance Department staff to identify the error, within 15 days of receiving the bill.

     

      (3) if the retiree is not able to sustain regular payments and wishes to request a temporary payment waiver, or if the retiree does not agree with the Finance Department staff on a payment arrangement or on a possible error in the bill, an appeal to the Town Manager may be made. The retiree should appeal in writing (preferably) to the Town Manager within 7 days of receiving the first response from the Finance Department or within 15 days of receiving the bill, if this is the first step.

 

      (4) the Town Manager, after consulting with the Finance Director, will review the appeal and respond to the retiree, usually within 7 days. If the appeal is denied, coverage may be dropped unless satisfactory payment arrangements are agreed upon.

 

b.   Coverage will be maintained while the appeal is being reviewed.

 

c.   Information on the appeal process will be attached to any bill noting an overdue balance.

 

     


RETIREE HEALTH INSURANCE APPEAL PROCESS

 

1.     Eligibility

Retirees who have chosen to carry health insurance through the Town, and who are required to pay towards monthly premiums are eligible to appeal insurance billing problems.

2.     Responsibilities

Retirees are responsible for asking questions, noting errors, requesting special payment programs, and otherwise communicating with Finance Department staff in a timely fashion when they have a question about a bill or problems paying it.

If problems cannot be resolved at that level, the retiree is responsible for appealing in a timely fashion, as described below under Procedure.

Finance Department Staff are responsible for sending monthly statements, collecting payments, answering questions about the billing and working to resolve problems. They are also responsible for sending a copy of the appeal process with all overdue notices.

Town Manager (or his designee) is responsible for reviewing appeals which are not resolved by the retiree and Finance Department staff.

3.     Procedure

 

STEP I - The retiree communicates with Finance Department staff on errors, special payment arrangements or other billing questions within 15 days of receiving an overdue bill at the latest.

 

STEP II - Finance Department staff work with the retiree to resolve the problem or explain the bill.  This would normally be done within 7 days.

 

STEP III - The retiree has 7 days from receiving an initial response to appeal further to the Town Manager.  Appeals to the Town Manager are preferably in writing, including the reasons for the appeal and the suggested resolution. The Town Manager (or designee) may request a hearing with the retiree depending on the nature of the appeal.  The retiree may also request a hearing at the time of the initial appeal to the Town Manager. The Town Manager or his designee will schedule any required meetings, review the appeal and respond as promptly as possible.

 

STEP IV - While the appeal is in process,  coverage will be maintained. If the appeal is denied and the retiree does not make arrangements for payment, coverage will be dropped.

 

In cases where a retiree needs a  waiver of payments, Step II may be skipped, and the retiree may appeal directly to the Town Manager within 15 days of receiving an overdue notice.

 

NUMBER TO CALL FOR MORE INFORMATION OR QUESTIONS

ABOUT BILLS: 968-2888, ext. 332