Loading...
Item S2M C ounty of f Monroe ELj » °o � BOARD OF COUNTY COMMISSIONERS /� r i � �� Mayor George Neugent, District 2 The Florida. Ke Se y I Mayor Pro Tem David Rice, District 4 Danny L. Kolhage, District I Heather Carruthers, District 3 Sylvia J. Murphy, District 5 County Commission Meeting November 14, 2017 Agenda Item Number: S.2 Agenda Item Summary #3553 BULK ITEM: No DEPARTMENT: Employee Services TIME APPROXIMATE: STAFF CONTACT: Maria Fernandez - Gonzalez (305) 292 -4448 9:00 a.m. AGENDA ITEM WORDING: Approval of a Resolution revising and replacing Resolution 190- 2017, and clarifying the procedure for distribution of $250 subsidy to Medicare- eligible Rule of 70 retirees. ITEM BACKGROUND: On September 5, 2017 the MCBOCC passed Resolution No. 190 -2017 establishing the procedure for distribution of $250 subsidy to Medicare - Eligible "Rule of 70" Retirees to offset the cost of Medicare Supplements; establishing an effective date. Additionally, the BOCC asked staff to research additional options for administering the Medicare Supplement subsidy. Two completed resolutions are being presented to the BOCC for consideration. Option A is a tax -free option to the Retirees, however, it requires the County to contract a vendor to implement a Health Reimbursement Arrangement (HRA) for each retiree, which introduces additional cost to the County ($3500- $4000) annually and administrative complexity. This option could also cause an inequity, since each retiree may pay a different rate for the supplement. Option B is tax -free for Retirees who remain on the County Health plan and pay the actuarial rate, however, for Retirees who elect to move off the County Health plan and purchase a Medicare supplement, the $250 subsidy will be considered a taxable fringe benefit. PREVIOUS RELEVANT BOCC ACTION: On September 5, 2017 the MCBOCC passed Resolution No. 190 -2017 establishing the procedure for distribution of $250 subsidy to Medicare - Eligible "Rule of 70" Retirees to offset the cost of Medicare Supplements; establishing an effective date. CONTRACT /AGREEMENT CHANGES: N/A STAFF RECOMMENDATION: Option B DOCUMENTATION: Resolution $250 subsidy 10 -30 -2017 Option A Resolution $250 subsidy 10 -30 -2017 Option B RESOLUTION 190.2017 FINANCIAL IMPACT: Effective Date: 1/1/2018 Expiration Date: N/A Total Dollar Value of Contract: N/A Total Cost to County: N/A Current Year Portion: Budgeted: Source of Funds: CPI: Indirect Costs: Estimated Ongoing Costs Not Included in above dollar amounts: Revenue Producing: Grant: County Match: Insurance Required: Additional Details: If yes, amount: N/A I to] WTAi lo oil ", Bryan Cook Completed Assistant County Administrator Christine Hurley 10/30/2017 5:46 PM Cynthia Hall Completed Budget and Finance Skipped Maria Slavik Skipped Kathy Peters Completed Board of County Commissioners Pending 10/30/2017 4:57 PM Completed 10/30/2017 5:54 PM 10/30/2017 3:33 PM 10/30/2017 3:33 PM 10/30/2017 5:56 PM 11/14/2017 9:00 AM OPTION A RESOLUTION NO. -2017 A RESOLUTION BY THE MONROE COUNTY BOARD OF COUNTY COMMISSIONERS REVISING THE PROCEDURE FOR DISTRIBUTION OF $250 SUBSIDY TO MEDICARE - ELIGIBLE "RULE OF 70" RETIREES TO OFFSET THE COST OF MONROE COUNTY HEALTH INSURANCE OR TO USE FOR PAYMENT OF MEDICARE SUPPLEMENTS; REPEALING RESOLUTION NO. 190 -2017; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, on July 25, 2017, the Monroe County Board of County Commissioners (BOCC) in its capacity as Plan Administrator of the Monroe County Group Health Plan adopted numerous changes to contribution rates of active employees, dependent and retirees under the Monroe County Group Health Plan, one of which was approval of Option 4A, a $250 /month subsidy to Medicare eligible "Rule of 70" retirees ( "Medicare Eligible Retirees "); and WHEREAS, the intent of Option 4A was to provide a monthly supplement for Medicare Eligible Retirees, to offset excessive claim costs; and WHEREAS, on September 5, 2017, the BOCC approved Resolution 190 -2017, setting forth the process and procedure for disbursement of the $250 subsidy to the Medicare Eligible Retirees; and WHEREAS, in the course of the September 5, 2017 meeting for approval of the Resolution, the Commissioners directed staff to make the payment as tax -free as possible for Medicare Eligible Retirees; and WHEREAS, the BOCC now wishes to revise Resolution 190 -2017 in order to clarify the process and procedure for disbursement of the $250 subsidy. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, Section 1 . Beginning January 1, 2018, Medicare Eligible Retirees will be given a supplement, in the maximum amount of $250 per month, which can be used one of two ways as follows: (a) For those Medicare Eligible Retirees who are members on the Monroe County Group Health Plan, the $250 monthly supplement will be used to offset the monthly actuarial cost the County will charge Medicare — eligible Rule of 70 Retirees beginning January 1, 2018. (b) For those Medicare Eligible Retirees who are not members of the Monroe County Group Health Plan, the supplement will be paid by the County into a Health Reimbursement Arrangement (HRA). This amount, up to a maximum of $250 per month tax free, will then be paid on a reimbursement basis to any Medicare Eligible Retiree, following submission by the Medicare Eligible Retiree of proof that the Medicare Eligible Retiree has paid for supplemental health insurance. The expense must have occurred on or after the date that the Medicare Eligible Retiree enrolled in the HRA. Section 2 . The following Medicare Eligible Retirees are entitled to the $250 Subsidy: (a) Rule of 70 Retirees who are currently Medicare - eligible, and who are members of the Monroe County Group Health Plan on 1/1/2018; and OPTION A (b) Persons who are currently actively employed by Monroe County BOCC or a participating employer in the Monroe County Group Health Plan, who meet the Rule of 70 criteria, who are members of the Monroe County Group Health Plan on 1/1/2018, and who retire on or after 1/1/2018. Section 3. Rule of 70 Retirees who are not yet eligible for Medicare shall qualify to receive the $250 Subsidy once they become Medicare - eligible. The obligation is on the Medicare - eligible Rule of 70 Retiree to notify the Benefits office once they become Medicare - eligible. Section 4 . Beginning with the 2018 Plan Year, on a monthly basis, the Monroe County Benefits office shall issue a list of Medicare Eligible Retirees to Finance, indicating (a) which Retirees are on the Plan, in which case they are entitled to use the supplement as an offset in accordance with Section 1(a), above; and (b) which Retirees are not on the Plan, in which case the County shall make the supplement funds for use by the Medicare Eligible Retirees on a reimbursement basis in accordance with Section 1(b), above. Section 5. Resolution 190 -2017 is hereby repealed and replaced in its entirety. This Resolution shall become effective immediately upon adoption by the BOCC. PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, Florida at a regular meeting held on the day of November, 2017. Mayor George Neugent Mayor Pro Tern David Rice Commissioner Heather Carruthers Commissioner Danny Kolhage Commissioner Sylvia Murphy BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA I: Mayor George Neugent (SEAL) ATTEST: KEVIN MADOK, CPA, CLERK M. Deputy Clerk 2 OPTION B RESOLUTION NO. -2017 A RESOLUTION BY THE MONROE COUNTY BOARD OF COUNTY COMMISSIONERS REVISING THE PROCEDURE FOR DISTRIBUTION OF $250 SUBSIDY TO MEDICARE - ELIGIBLE "RULE OF 70" RETIREES TO OFFSET THE COST OF MONROE COUNTY HEALTH INSURANCE OR TO USE FOR PAYMENT OF MEDICARE SUPPLEMENTS; REPEALING RESOLUTION NO. 190 -2017; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, on July 25, 2017, the Monroe County Board of County Commissioners (BOCC) in its capacity as Plan Administrator of the Monroe County Group Health Plan adopted numerous changes to contribution rates of active employees, dependent and retirees under the Monroe County Group Health Plan, one of which was approval of Option 4A, a $250 /month subsidy to Medicare eligible "Rule of 70" retirees ( "Medicare Eligible Retirees "); and WHEREAS, the intent of Option 4A was to provide a monthly supplement for Medicare Eligible Retirees, that could be used either as an offset against the cost of County- provided health insurance (in the case of the members who remain on the County health plan) or to be used for payment of Medicare supplemental insurance or for any other purpose designated by the Medicare Eligible Retiree (in the case of Medicare Eligible Retirees who are not members on the County health plan); and WHEREAS, on September 5, 2017, the BOCC approved Resolution 190 -2017, setting forth the process and procedure for disbursement of the $250 subsidy to the Medicare Eligible Retirees; and WHEREAS, the BOCC directed staff to make the $250 subsidy tax - exempt to the maximum extent possible; and WHEREAS, the BOCC now wishes to revise Resolution 190 -2017 in order to clarify the process and procedure for disbursement of the $250 subsidy. NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA, Section 1 . Beginning January 1, 2018, Medicare Eligible Retirees will be given a supplement, in the maximum amount of $250 per month, which can be used one of two ways as follows: (a) For those Medicare Eligible Retirees who are members on the Monroe County Health Plan, the $250 monthly supplement will be used to offset the monthly actuarial cost the County will charge Medicare — eligible Rule of 70 Retirees beginning January 1, 2018. (b) For those Medicare Eligible Retirees who are not members of the Monroe County Health Plan, the supplement will be paid by the County directly to the Medicare Eligible Retiree, in the form of a check disbursed each month in the amount of $250. As to this group, the payment constitutes a taxable fringe benefit. To be eligible for payment, these Medicare Eligible Retirees must provide the necessary documentation to the County in advance of the first payment. Necessary documentation will be provided to each eligible Retiree during the enrollment process. Section 2 . The following Medicare Eligible Retirees are entitled to the $250 Subsidy: OPTION B (a) Rule of 70 Retirees who are currently Medicare - eligible, and who are members of the Monroe County Group Health Plan on 1/1/2018; and (b) Persons who are currently actively employed by Monroe County BOCC or a participating employer in the Monroe County Health Plan, who meet the Rule of 70 criteria, who are members of the Monroe County Group Health Plan on 1/1/2018, and who retire on or after 1/1/2018. Section 3. Rule of 70 Retirees who are not yet eligible for Medicare shall qualify to receive the $250 Subsidy once they become Medicare - eligible. The obligation is on the Medicare - eligible Rule of 70 Retiree to notify the Benefits office once they become Medicare - eligible. Section 4 . Beginning with the 2018 Plan Year, on a monthly basis, the Monroe County Benefits office shall issue a list of Medicare Eligible Retirees to Finance, indicating (a) which Retirees are on the Plan, in which case they are entitled to use the supplement as an offset in accordance with Section 1(a), above; and (b) which Retirees are not on the Plan, in which case the Medicare Eligible Retirees shall receive the $250 payment as indicated in Section 1(b). Section 5 . Resolution 190 -2017 is hereby repealed and replaced in its entirety. This Resolution shall become effective immediately upon adoption by the BOCC. PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, Florida at a regular meeting held on the day of November, 2017. Mayor George Neugent Mayor Pro Tern David Rice Commissioner Heather Carruthers Commissioner Danny Kolhage Commissioner Sylvia Murphy BOARD OF COUNTY COMMISSIONERS OF MONROE COUNTY, FLORIDA I: Mayor George Neugent (SEAL) ATTEST: KEVIN MADOK, CPA, CLERK M. Deputy Clerk 2 IL I WHEREAS, prior to 1999, the County offered free health insurance to retirees, and WHEREAS, on March 13, 2001, the Monroe County Board of County Commissioners ( "B CC " "), in its capacity as the Plan Administrator of the Monroe County group insurance health plan ("Health Plan"), adopted Resolution No. 119-2001, stating the amount of money retirees must pay, above and beyond the Florida health insurance subsidy outlined in F.S. 112.313, in order to maintain Monroe County health insurance after retirement; and ' a) The $250 supplement may be used to offset the annual actuarial cost the County will charge Medicare --eligible Rule of 70 Retirees beginning January 1, 2018; or (b) The $250 supplement may be paid to the Medicare-eligible Rule of 70 Retirees who do not remain on the County Health Plan, for any other purchase. Section 2. The Monroe County Benefits office will send a mailing to potential retirees in order to confirm eligibility for the $250 Subsidy, In order to be eligible for the $250 Subsidy, the retiree must provide a W-9 to the Benefits office. Section 3. By no later than January 1, 2018, Monroe County Benefits office will generate and send a hard copy list of Medicare-eligible Rule of 70 retirees and send the list to the Clerk's Office (Finance). For each name on the list, Benefits will forward the retiree's W-9 to Finance. Section 4. The following groups of Medicare-eligible retirees are entitled to the $250 Subsidy: Section 5. Rule of 70 Retirees who are not yet eligible for Medicare shall qualify to receive the $250 Subsidy once they become Medicare-eligible. The obligation is on the Medicare- eligible Rule of 70 Retiree to notify the Benefits office once they become Medicare-eligible. Section 6. Beginning with the 2018 Plan Year, on a monthly basis, Finance will issue a check to each eligible retiree. Payments will be made in arrears. Checks will be issued on or about the Is' of every month, for the prior month. Section 7. For all subsequent months starting with February 2018, Benefits will send an update to Finance by no later than the second Friday of the month, indicating names of retirees added and deleted from the list. Finance will issue checks to Medicare-eligible Rule of 70 Retirees based on the updated lists, N Section 8. Beginning in December 2018, to maintain eligibility in the program, each retiree must provide a certification to Benefits, in a form designed by Benefits, attesting to the retiree's continued eligibility and providing updated contact information. The certification must be filed by the retiree on an annual basis, in order to maintain eligibility in the program. Section 9. The $250 Subsidy is a taxable fringe benefit. Therefore, on an annual basis, the Clerk's Office shall cause the appropriate forms (Form W -2 or Form 1099) to be issued to the taxpayer, and shall cause the appropriate forms to be filed with and reported to the Internal Revenue Service, in order to report the value of the taxable fringe benefit to the IRS. PASSED AND ADOPTED by the Board of County Commissioners of Monroe County, Florida at a regular meeting held on the 5th day of September , 2017. Mayor George Neugent Yes Mayor Pro Tem David Rice Yes Commissioner Heather Carruthers Yes Commissioner Danny Kolhage Yes Commissioner Sylvia Murphy yr,5- BOARD OF COUNTY COMMISSIONERS aA 11 F ; KE �DO ,CPA, CLERK �., -/ By: - -- Deputy Clerk A C7 CV W CC a U- W --.! ti OF MONROE COUNTY, FLORIDA BY )go�4 - e- � Mayor George Neugent MONROE COUNTY ATTORNEY q _ C , .�ED AS T FORM: I ,tom �sC "C U- U >: L� CHRISTINE LIM T - BARROWS ASSISTANT COUNTY "C zx DATE: 1"+ V 6 N � v - J w cc Z E Y SYSTEM FL 32315 -9000 . 1 Gross distribution OMB No. 1545-0119 D'fstMulfonS From Pensions, Annuities, $ 20,513.94 Retirement or 2a Taxable amount 2. 0 - 16 Profit- Sharing Puns, IRAs, -- Insurance $ 51ro�.1099 -R Contracts, etc. 2b Taxable amount Total not determined F] distribution E] PAYER'S federal RECIPIENTS identification 3 Capital gain [included 4 Federal i xmme tax number_ -- _ :. - i�.bcx2a) 59- 1354377 $ $ 4,120.00 REciP)ENTS name 5 Employee contributions 6 Net unreaf¢ed appreciation in employer's securities Copy c For Recipient's Records 4 S-2, $ 0.00 $ 7 Distribution Code(S) -7 IFW SIMPLE'. �. • 8 Other $, y � This inforrnation Is being famished to ue S ervice. Revenue Service. 9a Yarper oftow �1*+�on % 9b TdalwVweemrmrttiorrs $ 0.00 10 Amount allocable to. lM within 5 years $ 11 1st year of desig. Roth conub. FATCAiMng rumtemerrt 12 State tax withheld $ 13 St WPayees state no. 14 State distribution $ $ $ Account number (see instructions) 15 Local tax withheld 16 Name of locality 17 Local distribution $ $ Form 1 W9-R (keep for your records) www1r a gombrMlow Deparnnerrt of the T ressrsy- Irrmmat tieveriue Servtoe 4 S-2, I Florida Retirement System Division of Retirement RETIREE ANNUALSTATEMENT — 2016 Payee Name SSN Member Name rw SSN Personal Information Tax Status: Marital Status # of Allowances is Additional Amount $0.00 Stated Amount $385.00 Withholding Response YES (1) Annual Incom e/Deductions Income - Payment Type MONTHLY Retirement Benefit Health Insurance Subsidy (HIS) $ 20,513.94 $ 1,060.20 (2) TOTAL. GROSS Deductions Tax Withholding MONROE COUNTY BOCC MONROE COUNTY BOCC $ 21,574.14 $ 4,120.00 (Health) $ 1,363.92 $ 132.00 TOTAL DEDUCTIONS $ 5,615.92 Form 1099 -R Calculation Gross Income $ Minus HIS Tax Exclusion $ h060 20;(3 = Box 1 Gross Distribution ( ) $ ( 1 N Minus Box 5 (Simplified Method) $ 0.00 = Box 2a (Taxable Amount) Box 4 = Tax Withheld Box 7 = Distribution Code Box 9b = Total Employee Contributions for $ 20,513.94 $ 4,120.00 7 those who retired in current year $ (1) If you have income -tax related questions, please contact your tax advisor. You may also visit the Internal Revenue Services' (IRS) website at www.irs.aov call the IRS toll free at (800) 829 -1040 or 800 - 829 -4059 (TDD) if you are hearing impaired. Division of Retirement employees are not trained to provide tax or financial - related advice. (2) The Health Insurance Subsidy (HIS) benefit is an optional monthly payment that eligible pension recipients must apply for. The purpose of the HIS payment is to provide assistance with the cost of health insurance coverage. The HIS benefit is not an insurance policy and it is not a part of your Florida Retirement System pension. (3) The Health Insurance Subsidy Tax Exclusion amount shown above has already been used to reduce your Box 1 (Gross Distribution) amount reported to the IRS for the tax year. This excluded amount cannot be used twice. Therefore, eligible Public Safety Officer; CANNOT use this same amount again for a health insurance tax exclusion under the provisions of the Pension Protection Act/HELPS Act. Pension Protection ActlHELPS Act - Under the provisions of this Act some "Public Safety Officer" retirees (as determined by this Act) may be eligible for a tax exclusion up to $3,000 if qualified health insurance premiums were deducted directly from their pension payments, For more information, please contact your tax advisor or get general information from the IRS. You may visit the wwwjrs.gov website and refer to the Instructions Booklet for IRS Form 1040. For your convenience the document "Information for Retired Public Safety Officers Tax Exclusion" can be found on the 'Retiree Page" of the Division of Retirements website at www.frs.myflorida.com.