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HomeMy WebLinkAboutCMR- 474-02City of PaSo A to anager s Repor 4 TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: HUMAN RESOURCES DATE: SUBJECT: DECEMBER 16, 2002 CMR: 474:02 APPROVAL OF RESOLUTIONS AMENDING MEMORANDA OF AGREEMENT AND COMPENSATION PLANS IN ACCORDANCE WITH AGREEMENTS BETWEEN THE CITY AND EMPLOYEE GROUPS TO ADOPT AN ALTERNATIVE MEDICAL BENEFIT PROGRAM RECOMMENDATION This report recommends that Council approve the Voluntary Alternate Medical Benefit Pro~am to enable the City to offer the program to interested City employees by approving the attached resolutions amending the memoranda of ageement with each bargaining unit, and amending each of the City's compensation plans. BACKGROUND The City has been meeting with the employee ~oups for the past months to develop an incentive proD'am for employees to voluntarily elect to waive health insurance coverage with the City of Palo Alto for themselves and/or eligible covered family members provided they have health insurance coverage via another employer-sponsored or association medica! plan. All bargaining units have approved the attached plan which enables employees to waive their rights to some or all Palo Alto medical coverage and to instead receive cash payments of approximately half of the averaged monthly health insurance premium as defined in the Alternate Medical Benefit Summary Plan ($137 per month for single; $274 per month for employees plus one dependent; and $356.50 per month for family, where an employee waives all City coverage). DISCUSSION The Alternate Medical Benefit Pro~am provides a creative way to strengthen the City's bottom line while enhancing the City' s benefit program. The recommended pro~am is one component of the City' s commitment to offer health insurance to the employees who need it while also implementing a cost containment program. The City wi11 pay to employees who elect to participate in the plan half of the average monthly premium costs of the one-party, two-party and family rates depending on the family status of the employee. Thus, the employee will receive additional taxable income corresponding to around half of the CMR: 474:02 Pagelof 2 premium that would have been paid by the City and the City will save the other half of the health insurance premium. Where an employee elects alternative medical coverage for one or more dependents but retains City medical coverage for him/herself for him/herself and one dependent, the employee will receive a cash payment corresponding to about" half of the (averaged) premium amount saved. The City and eligible employees both win, while the health insurance companies lose the duplicate premiums. Attached is the summary plan document, which explains how the program will operate. RESOURCE IMPACT The City will have a cost avoidance with savings ranging from $19,000 to $96,000 depending on the level of participation, which is unknown. POLICY IMPLICATIONS This request does not represent any change to existing City policy. ENVIRON-MENTAL REVIEW This is not a project under the California Environmental Quality Act (CEQA). ATTACHMENTS Attachment 1 - Attachment 2 - PREPARED BY: Alternative Medical Benefit Summary Plan and Waiver of Medical Plan Resolutions amending Memorandum of Agreement with each bargaining unit and Resolutions amending Compensation Plans for all regular City employees. Leslie Loomis, Dfi'ector of Human Resources DEPARTMENT HEAD: LESLIE LOOMIS Director of Human Resources EMILY HARRISON Assistant City Manager CMR: 474:02 Page2of 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's depender~t(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HM© and PERS Choice PP© premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when opting out of City's medical coverage. 2003 One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical S:\HRD\BENEFITS~Alternate Med Ben Program III.doc coverage form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. S:\HRD\BENEFITS~Iternate Med Ben Program III.doc CiTY OF PALO ALTO Alternate Medical Benefit Program Waiver of Medical Plan (PEivIHCA) Coverage Form I hereby elect to participate in the City's voluntary Alternate Medical Benefit Program. I am covered under another eligible medical plan. As requested by the City, I have attached proof of this other medical coverage for myself and any dependents for whom I am waiving coverage (attached is a copy of an insurance I.D. card or enrollment form) I elect to waive coverage for: ~J Employee Only [] Employee and Spouse Q Employee and Family ~ Dependent(s) Only The names of the individuals for whom I am waiving coverage for are: i will be able to reenroll myself or my eligible dependents in the City's group medical insurance plan during any annual open enrollment period, or by notifying the City within 30 days of a qualified change in family status as defined by the Internal Revenue Code. Family status changes include my marriage or divorce; death or birth of a dependent or termination or commencement of my spouse's coverage or employment.. By signing this form, I acknowledge that I have read and agree to all of the terms above. Print Your Name Your Signature Today's Date Requested Waiver Date Plan You and/or Your Dependents are Covered By (attach copy of insurance i.d. card or enrollment form) TERMINATION OF PARTICIPATION hereby terminate my participation in the City's Alternative Medical Benefit Plan because of a qualified change in family status as defined in the City's Flexible Benefit Plan (link). I elect to be covered by the City's medical insurance plan as of the first day of the month following the termination of coverage effective Signature S\HRD\Benefits~lternate ben form\01/01/03 Date RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMEk~ING THE COMPENSATION PLAN FOR MANAGEMENT AND CONFIDENTIAL PERSONNEL AND COUNCIL APPOINTED OFFICERS ADOPTED BY RESOLUTION NO. 8194, ~£ND ~!4ENDED BY RESOLUTION NO. 8223, TO ADD ~_N ALTERNATE MEDICALBENEFIT PLAN The Council of the City of Pa!o Alto does RESOLVE as fol!ows: SECTION i. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Management Com_mensation Plan, adopted by Resolution No. 8194, and amended by Resolution No. 8223, is hereby amended by adding an Alternate Medical Benefit Plan, as set forth in Exhibit "i", attached hereto and incorporated herein by reference. SECTION 2. The Director of Administrative Services is authorized to implement the amended compensation plan as set forth in Section i. SECTION 3. The Council finds that this is not a project under the Cal±fornia Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: _AYES: NOES: ABSENT: _ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor. APPROVED: Senior Asst. City Attorney City Manager Diregtor of Administrative Services 021211 cl 8120297 Director of Human Resources ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when i.pting out of City's medical coverage. 2003 One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCUM E- l\cleow\LOCALS- l\Temp'C, lternate Med Ben Program l ll.doc Exhibit 1 coverage, form and provide proof of .eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS taw. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME-l\cleow\LOCALS-l\Temp~Alternate Med Ben Program IIl.doc RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMEN~!NG THE COMPENSATION PL.~q FOR CLASSIFIED PERSONNEL (SEIU)ADOPTED BY .RESOLUTION NO. 8056,AND AMENDED BY RESOLUTION NOS. 8059 ~ 8141, TO ADD ~ ALTERNATE MEDICAL BENEFIT PLAN The Council of the City Of Palo Alto does RESOLVE as fol!ows: SECTION i.Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Compensation Plan,-adopted by Resolution No. 8056, and amended by Resolution Nos.8059 and 8141, is hereby amended by adding an Alternate Medica!Benefit Plan, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. SECTION 2.The Director of Administrative Services is authorized to i~mlement the amended compensation plan as set forth in Section !. SECTION 3. The Council finds that this is not a project under the California Environ_mental Quality Act and, therefore, no environmental im_mact assessment is necessary. INTRODUCED AN~ PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: Senior Asst. City Attorney City Manager Director of Administrative Serqices Director of Human Resources 021211 cl 8120298 SIDE LETTER TO MEMOR_m/qD-tIM OF AG_~EE!~ENT BET~TEE~N CITY OF PALO ALTO AI~-D EACH OF ITS RECOGNIZED BARGAINING DqqITS, TO ~_DD ALTERNATE _MEDICAL BENEFIT PLAN ~HEREAS, under the te_~ms Of the City of Palo A!to's Memorandum of Agreemen< with each of its recognized bargaining units, including Loca! 7!5A, SEIU; Local 1319, International Association of Fire Fighters; the Palo Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, the City has agreed to pay the premiums for em_o!oyees' and eligible family members' choice of health insurance plan offered under the Public Emp!oyers' Medica! and Hospital Care Act (~PENHCA"), during the term of each respective Memorandum of Agreement; ~YKEREAS, the cost of monthly premiums to be paid by the City for em_mloyee and dependent health insurance under the PE~CA plan options wil! increase by an average of 22% for the year commencing January i, 2003; %E@EREAS, in view of the City's current budget picture and the large increases in em_m!oyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its employee groups to limit the City's 2003 health insurance expenditure increases, where this could be done consistent with law, the City's obligations to its emp!oyees and em_o!oyee interests; V~EREAS, both the City and participating employees can benefit financially from the Alternate Medica! Benefit plan, under which emp!oyees with alternate health .insurance coverage who choose to waive City health insurance coverage wil! receive incentive payments of around half of the cost savings resulting from the waiver. NOW, THEP~FORE, THE P.~TIES AGP~E AS FOLLOWS: // // // // // 021211 cl 8120296 I- Exhibit "A" The City of Palo Alto and each of its recognized bargaining units, including Local 715A,SEiU; Local 1319, international Association of Fire Fighters;the Pa!o Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs' Association, have agreed to add to their respective Memorandum of Agreement and Com_mensation Plan the Alternate Medical Benefit Plan, as described in the plan description (Exhibit i hereto). SEIU Representative Date Mayor Date i.~PF Representative Date PAPOA Representative Date Pa!o Alto Fire Chiefs' Date Association Representative 021211 ct 8120296 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative cove[age and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when opting out of City's medical coverage. 2003 One Party Two Party Family $137.00 $274,00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCUME-l\cleow\LOCALS-l\Temp~Alternate Med Ben Program III.doc Exhibit 1 coverage, form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will ¯ receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the firSt paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME~l\cleow\LOCALS-l\Temp~Alternate Med Ben Program IIl.doc fol!ows: RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE COMPENSATION PLAN FOR FIRE DEPARTY~NT PERSONNEL (IAFF)ADOPTED BY RESOLUTION NO.8030,TO ADD AN ALTE~ATE MEDICAL BENEFIT PLAN The Counci!Of the City of Palo Alto does RESOLVE as SECTION i. Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Compensation Plan, adopted by Resolution No. 8030, is hereby amended by adding an Alternate Medica! Benefit Plan, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. SECTION 2.The Director of Administrative Services is authorized to implement the amended compensation plan as set forth in Section !. SECTION 3. The Council finds that this is not a project under the California Environmenta! Quality Act and, therefore, nq environmenta! impact assessment is necessary. !NTRODUCEDAND PASSED: AYES: NOES: ABSENT: AIBSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: Senior Asst. City Attorney City Manager Director of Administrative Services Director of Human Resources 021211 cl 8120300 SiDE LETTER TO _MEMOR_hI~NDU_-M OF AGREE~NT BETWEEN CiTY OF PALO 9._LTO AND EACH OF ITS _RI~COGN!ZED BARGAINING L~_q!TS, TO ~_DD .~_LTER!~ATE MEDICAL BENEFIT PLAN ZrKE_REAS, under the te_rras of the City of Palo A!to's Hemorandum of Agreement with each of its recogm_ized bargaining units, including Local 7!5A, SEIU; Local 1319, International Association of Fire Fighters; the Palo Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs' Association, the City has agreed to pay the premiums for emp!oyees' and eligible family members' choice of health insurance plan offered under the Public Employers' Medica! and Hospital Care~Act ("PENHCA"), during the term of each respective Memorandum of Agreement; ¼rKEREAS, the cost of monthly premiums to be paid by the City for emp!oyee and dependent health insurance under the PE_wHiCA plan options wil! increase by an average of 22% for the year commencing January !, 2003; V~EP~AS, in view of the City"s current budget picture and the large increases in emp!oyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its employee groups to limit the City's 2003 health insurance expenditure increases, where this could be done consistent with law, the City's obligations to its em_m!oyees and emp!oyee interests; ~gHEREAS, both the City and participating employees can benefit financially from the Alternate Medical Benefit plan, under which em_mloyees with alternate health .insurance coverage who choose to waive City health insurance coverage will receive incentive payments of around half of the cost savings resulting from the waiver. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: // // // // // 021211 cl 8120296 1 Exhibit "A" The City of Palo Alto and each of its recognized bargaining units, including Loca! 7!5A,SEIU; Local 1319, International Association of Fire Fighters;the Pa!o Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, have agreed to add to their respective Hemorandum of Agreement and Compensation Plan the Alternate Hedical Benefit Plan, as described in the plan description (E~ibit 1 hereto). SE!U Representative Date Mayor Date iAFF Representative Date PAPOA Representative Date Pa!o Alto Fire Chiefs' Date Association Representative 02121 ] cl 8120296 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when ipting °ut °f City's medical c°ierage. 2003 One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCUME-l\cleow\LOCALS-l\Temp~Alternate Med Ben Program IIl.doc Exhibit 1 coverage, form and Provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS taw. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs du.ring the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage wil! be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME~l\cleow\LOCALS~l\TempkAIternate Med Ben Program lll.doc RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING THE COMPENSATION PLAN FOR POLICE NON-~ANAGEMENT PERSONNEL .ADOPTED BY RESOLUTION NO.8082,TO _ADD AN ALTERNATE MEDICAL BENEFIT PLAN The Council of the City of Palo Alto does RESOLVE as follows: SECTION I.Pursuant to the provisions of Section 12 of Article III of the Charter of the City of Palo Alto, the Compensation Plan, adopted by Resolution No.8082, is hereby amended by adding an Alternate Medical Benefit Plan, as set forth in Exinibit "A", attached hereto and incorporated herein by reference. SECTION 2.The Director of Administrative Services is authorized to _mplemen~ the amended compensation plan as set forth in Section i. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED ~_ND PASSED: AYES: NOES: ABSENT : ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Hayor APPROVED: Senior Asst. City Attorney City Manager Director of Administrative Services Director of Human.Resources 021211 cl 8120301 SIDE LETTER TO !~_!~_0B_%/qDU!~ OF AGREE~NT BETWEEN CITY OF PAL0 .~TO AND EACH OF ITS RECOGNIZED BARGAINING UNITS, TO ADD ALTERNATE I~DICAL BENEFIT PLAN ~EREAS, under the terms of the City of Palo A!to's Memorandum of Agreement with each of its recognized bargaining units, including Loca! 7!5A, SEIU; Local 1319, Internationa! Association of Fire Fighters; the Pa!o Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, the City has agreed to pay the premiums for employees' and eligible family members' choice of health insurance plan offered under the Public Emp!oyers' Medical and Hospita! Care Act (~PE~_HCA"), during the term of each respective Memorandum of Agreement; ~THEP~EAS, the cost of monthly premiums to be paid by the City for employee and dependent health insurance under the PEI~_HCA plan options wil! increase by an average of 22% for the year commencing January !, 2003; V~rHEREAS, in view of the City's current budget picture and the large increases in em_mloyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its em_m!oyee groups to limit the City's 2003 health insurance e~enditure increases, where this could be done consistent with law, the City's obligations to its employees and emp!oyee interests; WHEREAS, both the City and participating em_mloyees can benefit financially from the Alternate Medical Benefit plan, under which em_nloyees with alternate health insurance coverage who choose to waive City health insurance coverage wil! receive incentive payments of around half of the cost savings resulting from the waiver. NOW, THEREFOP~, THE PARTIES AGREE AS FOLLOWS: // /! /! /! /! 021211 cl 8120296 ! Exhibit "A" The City of Palo Alto and each of its recog~_ized bargaining units, including Loca! 7!5A,SEiU; Local 1319, international Association of Fire Fighters;the Pa!o Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, have agreed to add to their respective Memorandum of Agreement and Compensation Plan the Alternate Hedica! Benefit Plan, as described in the plan description (Exi~_ibit i hereto). SE!U Representative Date Hayor Date i~F Representative Date PAPOA Representative Date Paio Alto Fire Chiefs' Date Association Representative 021211 cl 8120296 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (P_ERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when opting out of City's medical coverage. One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the C ty. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\bOCUME~l\cleow\LOCALS~l\TempkAIternate Med Ben Program III.doc Exhibit i coverage, form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DQCUM E~ l\cleow\LOCALS- l\Temp~Alternate Med Ben Program I II.doc RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AKENDING THE COMPENSATION PLAN FOR FIRE CHIEFS' ASSOCIATION MANAGEMENT PERSONNEL ADOPTED BY RESOLUTION NO.8125,TO .ADD AN ALTERNATE MEDIC~ BENEFIT PLAN The Council of the City of Palo Alto does RESOLVE as follows: SECTION !. Pursuant to the provisions of Section 12 of Article II! of the Charter of the City of Palo Alto, the Compensation Plan, adopted by Resolution No. 8125,is hereby amended by adding an Alternate Medica! Benefit Plan, as set forth in Exhibit "A", attached hereto and incorporated herein by reference. SECTION 2.The Director of Administrative Services is authorized to implement the amended compensation plan as set forth in Section i. SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmenta! impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ~BSENT: ABSTENTIONS: ATTEST: City Clerk APPROArED AS TO FORM: Mayor APPROVED: Senior Asst. City Attorney City Manager Director of Administrative Services D_recuor of Human Resources 0212II cl 8120303 SIDE .LETTER TO YaEMOR_mANwDUM OF AGREEME_NT BET~£EE_N CiTY OF P~LO ~_L~TO AND EACH OF iTS _RECOGNIZED BARGAINING D-NITS, TO ADD .~_~TERNATE _m_EDiCAL BE~NEFiT PLAIq ~THEREAS, under the terms of the City of Palo Afro's Memorandum of Agreement with each of its recognized bargaining units, including Loca! 715A, SEIU; Loca! 1319, International Association of Fire Fighters; the Pa!o Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs' AssociatiOn, the City has agreed to pay the premiums for emp!oyees' and eligible family members' choice of health insurance plan offered under the Public Emp!oyers' Medical and Hospita! Care Act (~PEI~HCA"), during the term of each respective Memorandum of Agreement; WHEREAS, the cost of monthly premiums to be paid by the City for emp!oyee and dependent health insurance under the P~MHiCA plan options wil! increase by an average of 22% for the year commencing January !, 2003; I,[~EREAS, in view of the City's current budget picture and the large increases in emp!oyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its emp!oyee groups to limit the City's 2003 health insurance expenditure increases, where this could be done consistent with law, the City's obligations to its em_m!oyees and em_m!oyee interests; WHEREAS, both the City and participating employees can benefit financially from the Alternate Medica! Benefit plan, under which em_mloyees with alternate health .insurance coverage who choose to waive City health insurance coverage wi!l receive incentive payments of around half of the cost savings resulting from the waiver. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: II II II II II 021211 cl 8120296 ! Exhibit "A" The City of Palo Alto and each of its recognized bargaining units, including Loca! 7!5A, SE!U; Loca! 1319, Internationa! Association of Fire Fighters; the Palo Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs~ Association, have agreed to add to their respective Hemorand~m of Agreement and Compensation Plan the Alternate Hedica! Benefit Plan, as described in the plan description (Exhibit 1 hereto). SEIU Representative Date Hayor Date Representative Date PAPOA Representative Date Paio Alto Fire Chiefs' Date Association Representative 021211 cl 8120296 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMQ, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when opting out of Cit.is medical coverage. I 2003 One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available, to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCU M E~ 1 \cleow\LOCALS ~ l\Temp~Alternate Med Ben Prog ram I II.doc Exhibit 1 coverage, form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical c~pen enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during anopen enrollment period. Coverage will be effective the first day of the month following the change in family.status or on January 1st if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DQCUM E~I\cleow\LOCALS- l\Temp~Alternate Med Ben Program I ll.doc RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AI~ENDiNG SECTION 1401 OF THE MERIT SYSTEM RULES ~qD REGULATIONS REGARDING THE MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF PALO ALTO AND LOCAL 7!5A, SEiU, AFL-CI0, CLC, TO ADD ANT ALTERNATE MEDICAL BENEFIT PLAN The Council of the City of Palo Alto does RESOLVE as follows: SECTION i. Section 1401 of the Merit System Rules and Regulations is hereby amended as follows: 1401. Nemorandum of agreement incorporated by reference° That certain memorandum of agreement by and between the City of Palo Alto and Local 715A, SEIU, AFL-CIO, CLC, consisting of Preamble and Articles i through XXVIi and Appendices A through E, for a te_~m commencing May i, 2001, and expiring Apri! 30, 2004, as amended to add an Alternate Medical Benefit Plan, is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said memorandum, as amended, shall apply to al! emp!oyees in classifications represented by said Loca! 715A, SEIU, AFL-C!0, CLC, except where specifica!ly provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter wil! prevail over such other provisions as to emp!oyees represented by said Loca! 715A,SEIU, AFL-Ci0, CLC. SECTION 2.The Memorandum of Agreement ("MOA") incorporated into the Merit System Rules and Regulations ("Merit Rules") by Section 1 is a revision of the MOA incorporated into the Merit Rules by Resolution No. 8084, and adds an Appendix F to that MOA as shov,~ on Exhibit "A", attached hereto and incorporated herein by reference. 021211 cl 8120302 SECTION 3. The changes provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit, or proceeding pending or any judgment rendered prior to the effective date of this resolution. SECTION 4. The Council finds that this is not a project under the California Environmenta! Quality Act and, therefore, no environmenta! impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ABSENT : ATTEST: City Clerk APPROVED AS TO FO~KM: Mayor APPROVED: Senior Assistant City Attorney City Manager Director of Administrative Services Director of Human Resources 021211 cl 8120302 2 SIDE LETTER TO MP~O_R_h_NDD_-H OF AGREE_~NT BETWEEN CITY OF P.'~L0 ALTO .~!knD EACH OF ITS P~ECOGNiZED BA_RGA!IqiNG UNITS, TO ADD ALTERNATE N_ED!CAL BENEFIT PLAN ~6rHEREAS, under the terms of the City of Pa!o A!to's Memorandum of Agreement with each of its recognized bargaining units, including Loca! 715A, SEIU; Loca! 1319, Internationa! Association of Fire Fighters; the Pa!o Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, the City has agreed to pay the premiums for emp!oyees' and eligible family members' choice of health insurance plan offered under the Public Employers' Medica! and Hospita! Care Act ("PE_W£qCA"), during the term of each respective Memorandum of Agreement; k<HEKEAS, the cost of monthly premiums to be paid by the City for emp!oyee and dependent health insurance under the P~iCA plan options wil! increase by an average of 22% for the year commencing January !, 2003; ~EREAS, in view of the City's current budget picture and the large increases in emp!oyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its employee groups to limit the City's 2003 health insurance expenditure increases, where this could be done consistent with law, the City's obligations to its em_m!oyees and emp!oyee interests; WHEREAS, both the City and participating em_mloyees can benefit financially from the Alternate Hedica! Benefit plan, under which employees with alternate health insurance coverage who choose to waive City health insurance coverage wil! receive incentive payments of around half of the cost savings resulting from the waiver. // NOW, THEPdEFOP~E, THE PA_RTIES AG_REE AS FOLLOWS: // // // // 021211 cl 8120296 ! Exhibit "A" The City of Pa!o Alto and each of its recognized bargaining units, including Local 7!5A,SE!U; Local 1319, International Association of Fire Fighters;the Pa!o Alto Peace Of£icers' Association; and the -Palo Alto Fire Chiefs' Association, have agreed to add to their respective Memorandum of Agreement and Com_mensation Plan the Alternate Medica! Benefit Plan, as described in the plan description (Exhibit ! hereto). SEiU Representative Date Mayor Date !~F Representative Date PAPOA Representative Date Pa!o Alto Fire Chiefs' Date Association Representative 021211 cl 8120296 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives-his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of .the approximate payments an employee wil! receive per month, in accordance with their election, when i pting OUt of City's medical coierage. 2003 One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain; ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the c ty. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCUME~l\cleow\LOCALS-l\Temp~Alternate Med Ben Program III.doc Exhibit 1 coverage, form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form, Payments will be subject to state and federal taxes, Payments will not be considered as "earnings" under PERS law, TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period, Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs during the open- enrollment period, TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME~l\cleow\LOCALS-l\Temp~Alternate Med Ben Program lll.doc RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PAL0 ALTO AHEAFDiNG SECTION 1501 OF THE MERIT SYSTEM RULES .AND REGULATIONS REGABiDING THE KEMORANDUM OF AGREEMENT BETWEEN THE CITY OF PALO ALTO AND LOCAL 1319, INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, TO ADD AN ALTERNATE MEDICAL BENEFIT PL.AN The Council of the City of Palo Alto does _RESOLVE as follows: SECTION !. Section 1501 of the Merit System Rules and Regulations is hereby amended as follows: 1501. Memorandum of agreement incorporated by reference. That certain memorandum of agreement by and between the City of Palo Alto and Loca! 1319, Internationa! Association of Fire Fighters, consisting of Preamble and Articles I through XLII!, for a term commencing july i, 2000, and expiring June 30, 2003, as amended to add an Alternate Medical Benefit Plan, is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said memorandum shal! apply to all emp!oyees in classifications represented by said Loca! 1319, International Association of Fire Fighters, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter wil! prevail over such other provisions as to emp!oyees represented by said Local 1319, international Association of Fire Fighters. SECTION 2.The Memorandum of Agreement "MOA") incorporated into the Merit System Rules and Regulations "Merit Rules") by Section ! is a revision of the M0A incorporated into the Merit Rules by Resolution No. 8029, and adds an Article XL!V to that MOA as shown on Exhibit "A", attached hereto and incorporated herein by reference. 021211 cl 8120304 1 SECTION 3. The changes provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution,, suit, or Proceeding pending or any judgment rendered prior to the effective date of this resolution. SECTION 4. The Counci! finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSTENTIONS: ~SENT: ATTEST: City Clerk APPROVED AS TO Mayor APPROVED: Senior Assistant City Attorney City Manager Director of Administrative Services Director of Human Resources 02121 i cl 8120304 SIDE LETTER TO MEMORAND~ OF AGREE!~_A~T BETWE~ CiTY OF PALO P~T0 ~gD EACH OF ITS RECOGNIZED B~%_RGAiNiNG UNITS, TO ADD ALTERNATE !~D!CAL BENEFIT PLAN ~KEREAS, under the terms of the City of Pa!o A!to's Memorandum of Agreement with each of its recognized bargaining units, including Local 7!5A, SEIU; Local 1319, International Association of Fire Fighters; the Pa!o Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, the City has agreed to pay the premiums for emp!oyees' and eligible family members' choice of health insurance plan offered under the Public Emp!oyers' Medica! and Hospita! Care Act ("PE~CA"), during the term of each respective Hemorandum of Agreement; V~EREAS, the cost of monthly premiums to be paid by the City for employee and dependent health insurance under the PEM-A{CA plan options wil! increase by an average of 22% for the year commencing January i, 2003; Z<HEP~AS, in view of the City's current budget picture and the large increases in em_oloyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its emp!oyee groups to limit the City's 2003 health insurance e~-penditure increases, where this could be done consistent with law, the City's obligations to its em_o!oyees and employee interests; WHE_~tEAS, both the City and participating employees can benefit financially from the Alternate Medica! Benefit plan, under which employees with alternate health insurance coverage who choose to waive City health insurance coverage wil! receive incentive payments of around half of the cost savings resulting from the waiver. // NOW, THEP~FORE, THE P~TiES AGP~E AS FOLLOWS: // // // // 021211 cl 8120296 ! Exhibit "A" The City of Palo Alto and each of its recogm_ized bargaining units, including Local 715A, SEIU; Local !319, internationa! Association of Fire Fighters; the Pa!o Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, have agreed to add to their respective Hemorandum of Agreement and Com_mensation Plan the Alternate Hedica! Benefit Plan, as described in the plan description (Exhibit 1 hereto). SEiU Representative Date Hayor Date i~2F Representative Date PAPOA Representative Date Pa!o ~]to s_re Chiefs Date Association Representative 021211 cl 8120296 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when opt.ing out of City's medical coverage. one Party 2003 Two Party Family I $137.00.$274.00 $356.50 An employee who elects alternative medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be e!igible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCUME-l\cleow\LOCALS-l\Temp~Alternate Med Ben Program IIl.doc Exhibit 1 coverage, form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-week!y basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. -Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1s~ if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily-waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME-l\cleow\LOCALS-l\TempkAIternate Med Ben Program lll.doc P~SOLUT!ON NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO AMENDING SECTION 1601 OF THE ~IERiT SYSTEM RULES AND REGULATIONS REGARDING THE MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF PALO ALTO AND THE PALO ALTO PEACE OFFICERS' ASSOCIATION, TO ADD A_N ALTERNATE MEDICAL BENEFIT PLAN The Council of the City of Palo Alto does RESOLVE as follows: SECTION i. Section 1601 of the Herit System Rules and Regulations is hereby amended as follows: 1601. Memorandum of agreement incorporated by reference. That certain memorandum of agreement by and between the City of Palo Alto and Palo Alto Peace Officers' Association, consisting of Preamble and Sections 1 through 50, and Appendix A, for a term commencing July i, 2001, and expiring June 30, 2007, as amended to add an Alternate Medica! Benefit Plan, is hereby incor- porated into these Merit System Rules and Regulations by reference as though fully set forth herein.Said memorandum shal! apply to al! employees in classifications of police officer trainee, police officer, police agent, and police sergeant, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter wil! prevail over such other provisions as to employees represented by said Palo Alto Peace Officers' Association. SECTION 2.The Memorandum of Agreement ("MOA") incorporated into the Merit System Rules and Regulations ("Merit Rules") by Section 1 is a revision of the MOA incorporated into the Merit Rules by Resolution No. 8083, and adds a Section 51 to that MOA as shown on Exhibit "A", attached hereto and incorporated herein by reference. 021211 cl 8120299 1 SECTION 3. The changes provided for in this resolution shall not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit, or proceeding pending or any judgment rendered prior to the effective date of this resolution. SECTION 4. The Counci! finds that this is not a project under the California Environmental Quality Act and, therefore, no environmenta! impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: .ABSTENTIONS: ~SENT: ATTEST: City Clerk APPROVED AS TO FOR~: Hayor APPROVED: Senior Assistant City Attorney City Hanager Director of Administrative Services Director of .Human Resources 021211 cl 8120299 SIDE LETTER TO ~4EMO_;Lh_b-DUI~ OF AGREE_m_EIqT BETWEEN CITY OF PALO _~_LT0 AND EACH ~OF ITS RECOGNIZED BARGAINING UNITS, TO ADD ALTERNATE PFEDICAL BENEFIT PLAN WHEREAS, under the terms of the City of Palo Alto's Memorandum of Agreement with each of its recognized bargaining units, including Loca! 715A, SEIU; Local 1319, International Association of Fire Fighters; the Palo Alto Peace Officers' Association; and the Palo Alto Fire Chiefs' Association, the City has agreed to pay the premiums for employees' and eligible family members' choice of health insurance plan offered under the Public Emp!oyers' Hedical and Hospita! Care Act ("PEHHCA"), during the term of each respective Memorandum of Agreement; ~HEREAS, the cost of monthly premiums to be paid by the City for em_mloyee and dependent health insurance under the PE!~6CA plan options will increase by an average of 22% for the year commencing January !, 2003; ~%IEREAS, in view of the City's current budget picture and the large increases in employee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its emp!oyee groups to limit the City's 2003 health insurance expenditure increases, where this could be done consistent with law, the City's obligations to its em_m!oyees and emp!oyee interests; ~EREAS, both the City and participating em_mloyees can benefit financially from the Alternate ~edical Benefit plan, under which em_mloyees with alternate health .insurance coverage who choose to waive City health insurance coverage wil! receive incentive payments of around half of the cost savings resulting from the waiver. II NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: II II II II 021211 cl 8120296 ! Exhibit "A" The City of Pa!o Alto and each of its recogm__ized bargaining units, including Local 715A, SEIU; Local 1319, international Association of Fire Fighters; the Pa!o Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs' Association, have agreed to add to their respective Memorandum of Agreement and Compensation Plan the Alternate Medica! Benefit Plan, as described in the plan description E~hibit 1 hereto). SE!U Representative Date Mayor Date !~_FF Representative Date PAPOA Representative Date Pa!o Alto Fire Chiefs' Date Association Representative 021211 cl 8120296 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo Alto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PPO premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, whenopting out.. of City's medical cove[age. 2003 I One Party Two Party Family $137.00 $274.00 $356.50 An employee who elects alternative medical, coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver of medical C:\DOCUME-l\cleow\LOCALS-l\Temp~Alternate Med Ben Program lll.doc Exhibit i coverage, form and provide proof of eligible alternative medical insurance coverage to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law. TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollm6nt period. Employees may re-enroll themselves and/or their eligible family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. ¯ Coverage will be effective the first day of the month following the change in family status or on January 1st if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled fin the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME~l\cleow\LOCALS~l\TempkAIternate Med Ben Program IIl.doc RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ~!qEND!NG SECTION 1801 OF THE MERIT SYSTEM RULES AND REGULATIONS REGAPdDING THE MEMORANDUM OF AGREEMENT BETWEEN THE CITY OF PAL0 ALTO AND THE PALO ALTO FIRE CHIEFS' ASSOCIATION, TO ADD AN ALTERNATE MEDICAL BENEFIT PLAN The Council of the City of Palo Alto does RESOLVE as follows: SECTION !. Section 1801 of the Merit System Rules and Regulations is hereby amended as follows: 1801. Memorandum of agreement incorporated by reference. That certain memorandum of agreement by and between the City of Palo Alto and the Pa!o Alto Fire Chiefs' Association, consisting of Preamble and Articles I through >IX, for a term commencing July i, 2000, and expiring June 30, 2003, as amended to add an Alternate Medica! Benefit Plan, is hereby incorporated into these Merit System Rules and Regulations by reference as though fully set forth herein. Said memo- randum of agreement shal! apply to all emp!oyees in classifications represented by said Palo Alto Fire Chiefs' Association, except where specifically provided otherwise herein. In the case of conflict with this chapter and any other provisions of the Merit System Rules and Regulations, this chapter will prevail over such other provisions as to emp!oyees represented by said Palo Alto Fire Chiefs' Association. SECTION 2.The Memorandum of Agreement ("MOA") incorporated into the Merit System Rules and Regulations ("Merit Rules") by Section 1 is a revision of the MOA incorporated into the Merit Rules by Resolution No. 8126, and adds an Article to that MOA as shown on Exhibit "A", attached hereto and incorporated herein by reference. 021211 cl 8120305 SECTION 3. The changes provided for in this resolution shal! not affect any right established or accrued, or any offense or act committed, or any penalty of forfeiture incurred, or any prosecution, suit,- or proceeding pending or any judgment rendered prior to the effective date of this resolution. SECTION 4. The Counci! finds that this is not a project under the California Environmenta! Quality Act and, therefore, no environmenta! impact assessment is necessary. INTRODUCED AIqD PASSED: AYES: NOES: _ABSTENTIONS: ABSENT: ATTEST: City Clerk Mayor APPROVED AS TO FORM:APPROVED: Senior Assistant City Attorney City Hanager Director of Administrative Services Director of Human Resources 021211 C! 8120305 2 SIDE LETTER TO I~EMORANDLIM OF AGREEI~_~NT BETZrE~F~N CITY OF P.~_LO .~_LTO .hA]I] EACH OF ITS RECOGNIZED BARGAINING LRqiTS, TO ~3DD ALTEB_NATE HEDiC.~LL BENEFIT PLAN ~6~EREAS, under the terms of the City of Pa!o Alto's Memorandum of Agreement with each of its recognized bargaining Knits, including Local 7!5A, SEIU; Local 1319, Internationa! Association of Fire Fighters; the Palo Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs' Association, the City has agreed to pay the premiums for emp!oyees' and eligible family members' choice of health, insurance plan offered under the Public Emp!oyers' Hedical and Hospita! Care Act ("PEMHCAH), during the term of each respective Memorandum of Agreement; k~EREAS, the cost of monthly premiums to be paid by the City for em_mloyee and dependent health insurance under the PE_WMCA plan options wil! increase by an average of 22% for the year commencing January !, 2003; ~EREAS, in view of the City's current budget picture and the large increases in emp!oyee health care costs the City faces in 2003 and beyond, the City sought to reach agreement with its em_m!oyee groups to limit the City's 2003 health insurance expenditure increases, where this could be done consistent with law, the City's obligations to its em_m!oyees and em_m!oyee interests; k~EREAS, both the City and participating employees can benefit financially from the Alternate Medica! Benefit plan, under which em_mloyees with alternate health .insurance coverage who choose to waive City health insurance coverage wil! receive incentive payments of around half of the cost savings resulting from the waiver. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: /! /! /! // // 021211 cl 8120296 Exhibit "A'i The City of Palo Alto and each of its recognized bargaining units, including Loca! 7!5A,SEiU; Local 1319, international Association of Fire Fighters;the Pa!o Alto Peace Officers' Association; and the Pa!o Alto Fire Chiefs' Association, have agreed to add to their respective Hemorandum of Agreement and Compensation Plan the Alternate Medica! Benefmt Plan, as described in the plan description (E~hibit 1 hereto). SE!U Representative Date Mayor Date Representative Date PAPOA Representative Date Pa!o Alto Fire Chiefs' Date Association Representative 021211 cl 8120296 2 ALTERNATE MEDICAL BENEFIT PROGRAM If a regular employee and/or the employee's dependent(s) are eligible for medical insurance through another employer-sponsored or association medical plan, the employee may opt for alternative medical insurance coverage through the other employer-sponsored or association plan and waives his/her right to the City of Palo AIto's medical insurance coverage for the same individuals. Employees electing alternative coverage and no City coverage will receive cash payments of approximately half of the "averaged monthly premiums" for their medical insurance coverage. "Averaged monthly premiums" are the average of the Kaiser HMO, Blue Shield HMO and PERS Choice PP© premiums for the employee's City medical coverage available through the Public Employee Retirement System (PERS). Below are examples of the approximate payments an employee will receive per month, in accordance with their election, when opting out of City's medical coverage. 2003 "One Party .....Two Party .....Family ......... $137.00 $274.00 .......$356.50 An employee who elects alternative, medical coverage for one or more dependents but retains City coverage for the employee or for the employee and a dependent will receive cash payments of approximately half of the difference ¯ between the averaged monthly premiums of the medical coverage available to the employee (based on the employee's family status) and the averaged monthly premiums of the City of Palo Alto coverage the employee opts to retain. ELIGIBILITY Employees: to be eligible, an employee must be a regular employee (link) that is eligible for coverage in the PEMHCA medical plans and the employees participation in the program must result in a health insurance cost savings to the City. Dependents: To be eligible, a dependent must meet the definition of dependent as defined in the PEMHCA medical plan (link). Eligible Medical Insurance: An employee must be eligible to enroll in another employer-sponsored or association medical plan. Individual or non-group health insurance, does not qualify for eligibility. Retiree medical insurance through another employer, does qualify for eligibility. PARTICIPATION To participate in the Alternative Medical Benefit Program, eligible employees must be enrolled in the PERS health plan, complete a waiver ~of medical C:\DOCUME- I\cleow\LQCALS~ i\Temp~Alternate Med Ben Program IIl.doc Exhibit i coverage, form and provide proof of eligible alternative medical insurance coverage .to the Human Resources Department. Employees electing to participate in the Alternative Medical Benefit Program will receive cash payments. The payments will be paid on a bi-weekly basis and included in the employee's paycheck. Payments will begin on the first paycheck of the month following the employee's completion of the waiver form. Payments will be subject to state and federal taxes. Payments will not be considered as "earnings" under PERS law, TERMINATION OF ELECTION Participation in the Alternative Medical Benefit Program may be terminated and an employee may re-enroll in the City of Palo Alto medical plan in the event of a qualified change in family/medical insurance status as defined in Section 125 of the Internal Revenue Code and the City's Flexible Benefit Plan document or during a medical open enrollment period. Employees may re-enroll themselves and/or their eligible~family members in the City of Palo Alto medical plans by completing the appropriate enrollment forms within thirty days of the qualified change in family status or during an open enrollment period. Coverage will be effective the first day of the month following the change in family status or on January 1s~ if the enrollment occurs during the open- enrollment period. TAX CONSEQUENCES Payments made to employees who voluntarily waive medical coverage will be subject to all federal and state taxes. Employees are advised to review the tax consequences with their tax advisor. LEGAL CONSEQUENCES An employee is responsible for repayment of any payments made by the City of Palo Alto contrary to the terms of this program due to an employee's failure to notify the City of a change in status. ONGOING PARTICIPATION Employees enrolled in the Alternate Medical Benefit will be required to show proof of their alternative medical insurance and give authorization to the City to contact their alternative medical insurance coverage provider for the purpose of verifying alternative medical coverage. C:\DOCUME-l\cleow\LOCALS-l\Temp~Alternate Med Ben Program I II.doc