Title
Resolution Amending Resolution No. 020706 the Retiree Health Savings Plan (B)
This item involves adopting a resolution to amend the Retiree Health Savings Plan.
Explanation
In January 2002, the City of Gainesville began implementation of the Retiree Health Savings Plan (RHS) administered by ICMA-RC. The addition of this plan and the original adoption agreement that included only a mandatory contribution for all eligible members was a result of the collective bargaining process with the Communications Workers of America (CWA). The CWA, ATU and Management wanted to find a method to help employees better prepare for the additional cost of health insurance upon retirement. The ICMA-RC Vantagecare Retirement Health Savings Plan was developed by ICMA-RC as a vehicle to allow employees to accumulate assets in a tax-free plan to pay for post-employment medical, dental and vision expenses, including the retiree's portion of the health insurance premium. The reimbursements (disbursements) from this plan for qualified expenses are not taxable, therefore, allowing a tax-free source of income to pay for these post employment health care expenses.
The first plan amendment was effective in January 2003 and added an additional contribution method. The change allowed employees to make an irrevocable voluntary election to contribute to their account subject to plan maximums. This amendment offered employees the ability to put aside additional funds above the mandatory contribution as a means to better prepare for retirement.
The currently proposed plan amendments included in the Plan Amendments to the Employer VantageCare Retirement Health Savings Plan Adoption Agreement include an increase in the maximum fixed dollar contribution to $14,000 per year. The contribution is voluntary and irrevocable. The other proposed plan amendments are a result of recent IRS guidelines and effect the forfeiture provision of the plan. The original, and amended plan a...
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