Title
Resolution amending City of Gainesville’s Retiree Health Savings Plan(s) to Comply with Certain Provisions of the Patient Protection and Affordable Care Act by Removing In-service Distributions (B)
Explanation
Recently, the City received guidance from the vendor who administers the City’s Retiree Health Savings Plan related to certain provisions of The Patient Protection and Affordable Care Act (ACA) and the City’s various Retiree Health Savings Plan(s). The City provides Retiree Health Savings Plans to employees represented by four collective bargaining units and those employees not represented by a collective bargaining unit. These plans allow an employee to put aside funds through a mandatory contributions ranging from .5% to 5% (varies based on the respective collective bargain agreement) to help with the cost of post-employment medical, dental and vision expenses including the retiree’s contribution towards health insurance.
The Department of Health and Human Services, Department of Labor and Internal Revenue Service recently released guidance on how certain provisions of the Patient Protection and Affordable Care Act (“ACA”) apply to Health Reimbursement Accounts (“HRA”) such as your VantageCare Retirement Health Savings (“RHS”) Plan. Included in the guidance is a provision referred to as the Prohibition on Annual and Lifetime Limits, which restricts group health plans from placing limits on the dollar value of essential health benefits.
RHS plans, by design, restrict health benefits to the balances available in the participant’s account, and therefore by their very nature are inconsistent with the prohibition on annual and lifetime limits. The provision does not apply to all types of RHS plans. For instance, retiree-only plans, where reimbursements for medical expenses are restricted to terminated employees, are exempt from this provision. Also, an in-service plan, where reimbursements are available to both active and terminated employe...
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