2023 - 2026 Local 39 Memorandum of Understanding: Article 16: Medical Benefits for Future Retirees

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What’s on this Page

• 16.1 Retiree Medical Coverage
• 16.2 County Contribution Toward Retiree Medical Plans – Employees Hired Before January 1, 2009
• 16.3 Retiree Health Reimbursement Accounts (HRA) County Contribution Toward Retiree Medical Plans – Employees Hired On or After January 1, 2009
• 16.4 Surviving Dependent – County Contribution for Employees Hired Before January 1, 2009
• 16.5 Surviving Dependents – County Contribution for Employees Hired On or After January 1, 2009

Read Next: Article 17: Leaves Of Absence

An eligible retiree and eligible dependent(s) (as defined below), may be enrolled in a County offered medical plan, but is allowed only to enroll either as a subscriber in a County offered medical plan or, as an eligible dependent 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 (1) employee or retirees’ plan (i.e., a retiree and their dependents cannot be covered by more than one (1) County-offered health plan). An eligible dependent is (as defined in each plan document / summary plan description):

• Either the retiree’s spouse or domestic partner; or
• A child up to age 26 or a disabled dependent child regardless of age.

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1. Eligibility: In order to be eligible for this benefit, the retiree must have:
   1. Completed at least ten (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 ten (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. If retiree previously deferred membership in SCERA, the retiree forfeits eligibility to all benefits described in this section.
   4. 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 this Article 16.2 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 16.3 (County Contribution toward Retiree Medical Plans – Employees Hired On or After January 1, 2009 – Effective January 1, 2009).
2. County Contribution:
   The County shall contribute toward the cost of County offered medical plans for any eligible retiree whether or not the retiree covers eligible dependent(s), the same amount as it contributes toward the cost of County offered medical plans for active unrepresented administrative management employees (Bargaining Unit 50) in the Salary Resolution. Any additional medical contributions provided only to retirees along with any eligibility requirements to receive those contributions shall be conferred as prescribed in the Salary Resolution.
3. Additional Dependents:
   Retirees eligible under this Section, may enroll eligible dependent(s) in the County offered medical plan elected by the retiree but the retiree is responsible for all premium costs in excess of the County’s contribution.
4. Retirees Who Reside out of Managed Care Service Area:
   Retirees retired on or after August 1, 2023, and their surviving dependents (who meet eligibility requirements in Article 16.4), who reside outside of all County-offered managed care medical plans’ service areas, are eligible to receive a contribution of $500 per month into the Retiree Health Reimbursement Account.  All retirees and eligible dependents who receive a County Contribution to a Retiree HRA are responsible for Medicare Part B premiums.
   
   

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For employees hired on or after January 1, 2009, the County shall contribute to a Defined Contribution retiree medical benefit plan for each eligible employee in the form of a deposit into a Health Reimbursement Arrangement (HRA) account, as described below. Any eligible retiree and eligible dependent(s), as defined below, may enroll in a County offered medical plan, but the retiree is responsible for all costs (including County offered retiree medical plan and Medicare Part B premiums).

1. Eligibility
   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 HRA contribution, if they have completed two (2) full years of consecutive Sonoma County regular service (excluding overtime) in paid status.
   3. If an employee separates employment before meeting the eligibility requirement, the employee shall receive no benefit.
   4. Laid-Off & Restored Employees. Employees who were employed by the County on or after January 1, 2009, but who were laid off thereafter shall be eligible for the benefit described in this Article 16.3 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.
2. County Contribution
   1. Initial County Contribution:
      1. On the first pay date following completion of the eligibility requirements, regular full-time employees shall receive a lump sum contribution of $2,400 deposited into an HRA account established in their name.  Thereafter, contributions will be made each pay period based on the actual hours worked during that pay period.
      2. The lump sum contribution amount for regular part-time employees shall be pro-rated based on their allocated position at the time of initial eligibility 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 HRA account).
   2. Regular County Contribution:  
      After the initial contribution (defined above) is made, the County shall contribute $0.58 per paid status hour (no more than eighty (80) hours biweekly), 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.
   3. Access to Account Balance:
      1. Participants may access the balance in their Retiree HRA account upon termination of employment and attainment of age 50, or upon retirement from the Sonoma County Retirement System, whichever is earlier.
      2. Participants may defer accessing the account balance to any time beyond the earliest date described in (a).
      3. Amounts that remain in the account balance are available to reimburse the participant for the same permitted medical expenses for the spouse and any other dependent covered under the retiree medical plan, however, federal regulations do not permit the inclusion of expenses for domestic partners.
   4. Survivors of Eligible Retirees With Account Balances:
      1. Spouses and eligible dependent children or dependent adults that are disabled may continue to access account balances after the death of the retiree.
      2. Domestic partners are not permitted access to the account balances of the participant by virtue of restrictions in the federal regulations that govern these types of accounts.
   5. Forfeiture of Account Balance:
      1. If an active employee dies prior to retirement, the amount of account balance is available to participating spouses and dependents to reimburse them for medical expenses permitted under the relevant section of the Internal Revenue Code.
      2. Account balances in part or in total for active participants or retirees without any eligible spouse or dependent or unused account balances after the death of the last eligible spouse or dependent will be forfeited and returned to all other active and retired participants in the form of a dividend allocated in direct proportion to the amount to be distributed divided by the total account balance for all participants applied to each individual account balance. These distributions will occur within 120 days after the annual certified audit of the plan is submitted to the administrator and the County.

This benefit will be subject to regulation under Section 105(b) of the Internal Revenue Code and subject to revenue rulings for these types of plans as promulgated.

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Upon the death of a retiree enrolled in a County offered retiree medical plan, the County will continue to pay the County’s contribution toward the medical plan premium costs as follows:

One eligible surviving dependent will be allowed to continue their coverage if the surviving dependent meets each of the following criteria:

1. Has been an eligible dependent of a retiree who was eligible to receive a contribution toward a County offered retiree medical plan under Section 16.2 prior to the death of the retiree, and
2. Either be enrolled or have waived coverage at the time of the retiree’s death.

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 will be responsible for all premium costs in excess of the County contribution.

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Upon the death of a retiree enrolled in the Defined Contribution retiree medical benefit plan (as defined in Section 16.3), eligible surviving dependents may continue participation in the County offered medical plan but remain responsible for all costs (including premiums).

To be eligible, a surviving dependent must either be enrolled or have a waiver on file with the County, at the time of the retiree’s death.

This benefit will be subject to regulation under Section 105(b) of the Internal Revenue Code and subject to revenue rulings for these types of plans as promulgated.

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