2023 - 2026 DSA Memorandum of Understanding: Article 19: Medical Benefits for Future Retirees

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What’s on this Page

• 19.1 Retiree Medical Coverage
• 19.2 County Contribution Toward Retiree Medical Costs – Employees Hired Before January 1, 2009
• 19.3 County Contribution Toward Retiree Medical Costs – Employees Hired On or After January 1, 2009 – Effective January 1, 2009
• 19.4 Surviving Dependent – County Contribution for Employees Hired Before January 1, 2009
• 19.5 Surviving Dependent – Eligibility to Participate in a County Offered Medical Plan – Employees Hired On or After January 1, 2009
• 19.6 DSA Retiree Medical Trust
  • 19.6.1 Contributions to the DSA Trust
  • 19.6.2 Leave Accruals Paid Out at Retirement
  • 19.6.3
  • 19.6.4
  • 19.6.5
  • 19.6.6
  • 19.6.7 Legal Compliance Review

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19.1 Retiree Medical Coverage

Eligible retirees and eligible dependent(s) (as defined below) may, but are not required to, enroll in a County offered medical plan. Retirees who elect to enroll in a County offered medical plan are allowed only to enroll either as a subscriber in a County offered medical plan or, as the dependent spouse / domestic partner of another eligible County employee / retiree, but not both. If an employee / retiree is also eligible to cover their dependent child / children, each child will be allowed to enroll as a dependent on only one employee or retirees' plan (i.e., a retiree and his or her dependents cannot be covered by more than one County-offered health plan). Retirees and eligible dependents who enroll in a County offered medical plan are responsible for all costs (including County offered retiree medical plan premiums and Medicare Part B premiums).

An eligible dependent is (as defined in each plan document / summary plan description):

• Either the retiree’s spouse or registered domestic partner; or
• An unmarried child to age 26 or a disabled dependent child regardless of age
• Upon the death of a retiree, an eligible surviving dependent who was either enrolled or had waived coverage at the time of the retiree’s death.

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19.2 County Contribution Toward Retiree Medical Costs – Employees Hired Before January 1, 2009

1. Eligibility for County Contribution
   In order to be eligible for this benefit, the retiree must have:
   1. Completed at least 10 years of consecutive regular full-time paid County of Sonoma service employment. The equivalent worked or purchased regular part-time County service time can be counted toward the 10 years. However, any miscellaneous purchased service time such as Extra Help, contract, and leave of absence service time does not count toward this eligibility requirement, and
   2. Have been a contributing member of the Sonoma County Employees’ Retirement Association (SCERA) for the same time period, and
   3. Retire directly from Sonoma County service.
   4. Current retirees receiving a County contribution for retiree medical based on eligibility at the time of their retirement who do not meet the 10 year requirement as listed above are grandfathered in at the eligibility at the time of their retirement.
   5. County Service-Connected Disability Retirement
      Regular employees hired or rehired after July 1, 1990 but before January 1, 2009 who have less than ten (10) years of service are eligible to receive a County contribution toward the cost of a County offered medical plan for the eligible retiree only, if they:
      1. Have been a contributing member (or a contribution was made on their behalf) of the Sonoma County Employees’ Retirement Association (SCERA) for the period of time they have been employed by the County;
      2. Have incurred an occupational injury and are granted a service-connected disability retirement from SCERA for that injury; and
      3. Have received a Permanent Disability Rating equal to or greater than 50% as approved by the California Workers’ Compensation Appeals Board and the Sonoma County Board of Supervisors.
   6. Laid-Off & Restored Employees
      Employees who were employed by the County prior to January 1, 2009, but who were laid off thereafter shall be eligible for the benefits described in Article 19.2 provided that they are subsequently restored to County employment, pursuant to Civil Service Rule 11.4, rejoin the County retirement system, and are otherwise eligible for retiree medical benefits under this Section. The break in service caused by the layoff shall be bridged upon restoration such that, although no service time is earned during the break, consecutive service is restored for eligibility for this benefit. To the extent allowed by law they shall not be eligible for the benefits described in Article 19.3 (County Contribution toward Retiree Medical Plans - Employees Hired On or After January 1, 2009 - Effective January 1, 2009).

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19.3 County Contribution Toward Retiree Medical Costs – Employees Hired On or After January 1, 2009 – Effective January 1, 2009

Eligibility for County Contribution

1. An employee must have been a contributing member (or a contribution was made on their behalf) of the Sonoma County Employees’ Retirement Association (SCERA) for the eligibility period described below.
2. Regular full-time employees and part-time employees in an allocated position of 0.5 full-time equivalent or greater, hired on or after January 1, 2009 are eligible to receive a County DSA RMT contribution, if they have completed two (2) full years of consecutive Sonoma County regular service (excluding overtime) in pay status.
3. If an employee separates employment before meeting the eligibility requirement, the employee shall receive no initial contribution.
4. All previous County contributions made to the existing County Retiree Health Reimbursement Accounts on behalf of current active Bargaining Unit members, will be transferred to the DSA Retiree Medical Trust, upon documentation provided to County by the Association of the tax-exempt status and that the transfer of such balances complies with the IRS regulations. 
5. Laid-Off & Restored Employees
   1. Employees who were employed by the County on or after January 1, 2009, but who were laid off thereafter shall be eligible for the benefits described in this Article 19.3 provided that they are subsequently restored to County employment, pursuant to Civil Service Rule 11.4, rejoin the County retirement system, and are otherwise eligible for retiree medical benefits under this Section. The break in service caused by the layoff shall be bridged upon restoration such that, although no service time is earned during the break, consecutive service is restored for eligibility for this benefit.

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19.4 Surviving Dependent – County Contribution for Employees Hired Before January 1, 2009

Upon the death of a retiree, the County will continue to pay the County’s contribution as described in Article 19.6.1.B. as follows:

One eligible surviving dependent, as described in Section 19.1, will continue to receive the County's DSA RMT contribution if the surviving dependent was an eligible dependent of a retiree who was eligible to receive a DSA RMT contribution prior to the death of the retiree.

Any additional surviving eligible dependent(s) enrolled under the retiree's medical plan at the time of the retiree's death, may continue participation in the County offered medical plan but remain responsible for all premium costs.

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19.5 Surviving Dependent – Eligibility to Participate in a County Offered Medical Plan – Employees Hired On or After January 1, 2009

Upon the death of a retiree (as defined in Article 19.3), an eligible surviving dependent(s) who was eligible to be enrolled in a County offered medical plan prior to the retiree's death, may continue participation in the County offered medical plan but remains responsible for all costs (including premiums).

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19.6 DSA Retiree Medical Trust

Establishment of the Trust

The Association has established a Retiree Medical Trust (DSA RMT) for past, current and future members of Bargaining Units 46 and 47 (DSA) and Bargaining Unit 43 (DSLEM) and their surviving dependents. The class of eligible DSA RMT participants has been established according to trust documents approved by the Association, without any involvement of the County (beyond the funding obligations herein). The establishment of and participation in the Trust shall be the complete and sole responsibility of the Association. The County does not have any involvement in its design, its administration or in the benefits paid, nor shall the County have any responsibility for any actions of the Trust or its trustees or of the Association with respect to the Trust. The Association will provide sufficient documentation to County to ensure the Trust has acquired and maintains tax exempt status, including an IRS determination letter, pursuant to Internal Revenue Code provision 501(c)(9) and all other applicable laws and regulations; and the Association has procured an appropriate Private Letter Ruling(s) (PLR) authorizing the funding of the trust on a tax-favored basis to include County contributions during employment and post employment sick and/or vacation leave contributions, and the transfer of existing Health Reimbursement Account balances currently held on behalf of active bargaining unit members, will be made to the Trust on a pre-tax basis.

19.6.1 Contributions to the DSA Trust

In accordance with the terms of Article 19 of the MOU the County shall make the following contributions to the DSA Trust on behalf of eligible bargaining unit members:

1. County Contribution
   Effective the pay period starting May 21, 2019, for each regular filled DSA position in paid status, the County shall contribute $25.00 each pay period to the DSA RMT, through expiration of the MOU and absent a successor MOU continuing such contribution.
2. County Contribution  - Employees Hired Before January 1, 2009         
   Effective upon adoption of the MOU extension by the Board of Supervisors, employees hired before January 1, 2009 who meet the eligibility requirements outlined in Section 19.2-A above, and retire directly from County service, the County shall contribute $500 per month to the DSA Retiree Medical Trust.
3. County Contribution - Employees Hired On or After January 1, 2009
   1. Initial County Contribution
      1. On the first pay date following completion of the eligibility requirements outlined in Article 19.3.A above, regular full-time employees shall receive a lump sum contribution of $2,400 deposited into the DSA RMT account established in their name. Thereafter, contributions will be made each pay period based on pay status hours (no more than 80 hours bi-weekly), not including overtime, per pay period.
      2. The lump sum contribution amount for regular part-time employees shall be pro-rated based on their allocated position only (e.g., a regular employee in a 0.5 full-time equivalent allocated position will receive a lump sum contribution of $1,200 deposited into their DSA RMT account).
      3. Regular County Contribution
         After the initial contribution (defined above) is made the County shall contribute $0.58 per pay status hour (no more than 80 hour bi-weekly), not including overtime, for each eligible employee. For a full-time employee, this equates to approximately $100 per month or $1,200 per year, after the initial eligibility period is met.
         
         The County will continue contributions called for in this Subsection directly to the employees' current HRA account until such time as the County has the ability to make the contributions directly to the DSA RMT, no later than November 30, 2018.
4. Employee Contribution
   Beginning the pay period starting May 21, 2019, each regular employee in paid status filling a classification in Bargaining Units 46 and 47 shall have a mandatory pre-tax reduction of $75.00 per pay period taken from their regular earnings and paid into the DSA RMT. In the event that an employee does not have sufficient earnings to pay the pre-tax reduction in any given pay period, the employee contribution will be made only up to the amount of his or her earnings.
   
   This Article 19.6.1.D is not grievable under the MOU.

19.6.2 Leave Accruals Paid Out at Retirement

Effective upon receipt of a PLR regarding the transfers of sick leave and vacation leave into the Trust and an opinion letter (if available) by the State of California Division of Labor Standards Enforcement regarding the payout of vacation (Opinion Letter), the parties shall execute a side letter to this MOU providing that no earlier than December 10, 2013, each regular employee filling a classification in Bargaining Units 46 and 47 shall have 50% of their existing payouts of accumulated vacation owed to them at the time of retirement go directly into individual accounts in the DSA RMT.

19.6.3

For Bargaining Unit members hired on or after January 1, 2009, the County contributions to the DSA RMT as described in Articles 19.6.1.A and 19.6.1.C, constitute the County’s entire obligation towards medical benefits upon termination and/or retirement and the parties agree that no other retiree medical benefits exist.

For Bargaining Unit members hired before January 1, 2009, the County contributions to the DSA RMT described in Article 19.6.1.A and Article 19.6.1.B, constitute the County’s entire obligation towards medical benefits upon retirement and the parties agree that no other retiree medical benefits exist, including Medicare Part B reimbursement.

19.6.4

The Association is solely responsible for obtaining any necessary IRS approvals, and represents it has established and administers the DSA RMT. The Association will indemnify, defend and hold harmless the County, its agents, officers, and employees, against any and all claims or legal proceedings regarding the Trust’s establishment. The Association has established the Trust, and to the extent permitted by law and the IRS, the Trust will indemnify, defend and hold harmless the Association and the County, its agents, officers, and employees, against any and all claims or legal proceedings regarding the operation of the Trust. In the event that inclusion of such a provision compromises the ability of the Trust to secure the requisite tax exempt status, the indemnity, defense and hold harmless provision shall not be incorporated into the Trust document, but that absence from the Trust shall not affect the obligation of DSA to indemnify, defend and hold harmless the County, its agents, officers, and employees. If the Association joins another Retiree Medical Trust, the Association shall make all reasonable efforts to procure indemnification language related to the operation of the Trust on behalf of itself and its members/survivors waives any cause of action against the County based on administration and operation of the DSA RMT.

19.6.5 

In consideration for the benefits provided in Article 19.6, the Association on behalf of itself and its members / survivors waives any cause of action based on County conduct regarding retiree medical benefits from April 1, 2007 through date of adoption by the BOS of the DSA/ DSLEM MOUs. Unless compelled by operation of law, the Association further agrees it will not initiate, financially support, or participate in any grievances, claims, demands, or suits against the County resulting from or in connection with the matters described herein.

19.6.6 

The DSA RMT will require eligible Bargaining Unit retirees to sign an agreement as part of their participation in the Trust, which will include statements that

(1) the participant waives any cause of action against the County or the Association regarding changes to retiree medical benefits from April 1, 2007 through the date of adoption by the BOS of the 2008 - 2010 DSA/ DSLEM MOUs; and

(2) the participant understands that the benefits identified in DSA Article 19.6.3 (DSLEM Article 6.6.3) constitute the County’s entire obligation towards post-employment medical benefits and no other post-employment medical benefits exist. The parties agree to continue discussing this Section to address concerns raised by DSA with IRS regulation compliance.

19.6.7 Legal Compliance Review

In the event a legal review identifies legal compliance problems, the parties will immediately meet and confer to address and resolve the outstanding issues.

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