Retiree Benefits

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POLICY STATEMENT 110

RETIREE BENEFITS 

Prepared by:  Dale Johnson, Employee Benefits Manager

Supersedes:  7/26/2012

Adopted by Council:  10/30/14

Effective:  10/30/14 

POLICY PURPOSE - To maintain the Town’s ability to attract and retain experienced employees and recognize the significant value of long-term Town service by providing benefits (in a cost effective manner) to qualified retirees of the Town of Cary. 

COVERAGE - Qualified retirees are defined as employees who separate from employment with the Town of Cary as a result of retirement from the Local Government Employees’ Retirement System (LGERS), or qualify for retirement due to disability as approved by LGERS.   Retirees with a minimum of 15 consecutive years of creditable service with the Town and with LGERS, immediately prior to the effective date of retirement, are eligible to receive an insurance subsidy towards the retiree’s individual health insurance cost. Retirees with less than 15 consecutive years of creditable service with the Town of Cary who qualify for disability retirement and are disabled as a result of a serious injury in the line of duty for the Town may qualify for a subsidy as noted below. 

HEALTH AND VISION INSURANCE - The qualified retiree, and any eligible spouse who is covered by the Town’s group health and vision insurance plan at the time of retirement, is allowed to remain covered on the plan that is provided by the Town to active employees, until the retiree or spouse obtains coverage on Medicare, based on federal Medicare eligibility criteria.  Dependent children of the retiree are eligible for continuation of coverage under the provisions of COBRA effective with the date of retirement, provided they meet the eligibility criteria of the plan.  When the retiree’s spouse obtains coverage on Medicare, the spouse is responsible for obtaining his or her own Medicare supplement and Part D.  

The Town will subsidize a prorated portion of the cost of coverage for the qualified retiree's individual health coverage while covered by the Town's group health insurance plan, based on the rates set forth in the Town’s approved health insurance budget each fiscal year.  Beginning with 15 years of service, the Town will subsidize 50% of the individual funded rate. Each additional year of service beyond 15 years increases the percentage of the subsidy by 5%, with a maximum subsidy of 100% for 25 years of service. The retiree is responsible for paying the full cost of any coverage (health and dental) for an eligible spouse according to the prevailing insurance rate fee schedule while the retiree is covered on the Town’s group health insurance plan.  Since the subsidy is only available to the living retiree, should the retiree pre-decease a covered spouse, the spouse may remain on the plan by paying the full cost of individual coverage based on the prevailing insurance rate fee schedule. 

When the eligible retiree is no longer covered by the Town’s group health insurance plan due to coverage under Medicare or some other form of a Federal Government-sponsored health insurance program, the Town will continue to provide a subsidy to the retiree to be applied to the cost of the retiree’s Medicare supplemental plan, Part D prescription drug plan, Town-sponsored group vision plan, and Town-sponsored group dental plan, or any other applicable health-related supplemental plan. The amount of the subsidy applied toward these plans shall not exceed 100% of the amount due each month to keep these plans in force, will not change more than once each fiscal year, and will never exceed the amount of the subsidy provided to the retiree still active on the Town’s group health insurance plan. The retiree is responsible for paying any balance due after the Town’s subsidy (if applicable) has been applied. 

Town employees who are approved for and receive disability retirement from LGERS as a direct result of a serious personal injury received in the line of duty for the Town, and who have less than 15 years of service with the Town, may make application to Council, via the Human Resources Department, to request a subsidy of a portion of their individual health plan cost under this policy.  Council may make a determination to credit the retiree with between fifteen (15) and twenty-five (25) years of service such that they will be eligible for a subsidy toward their individual health plan cost. 

DENTAL INSURANCE - The qualified retiree and any eligible spouse is allowed to remain covered by the Town's group dental insurance plan for as long as the retiree continues to request this coverage, provided the cost of coverage is paid by the retiree or is covered by the monthly subsidy when the retiree is no longer covered by the Town’s group health insurance plan.  Since the subsidy is only available to the living retiree, should the retiree pre-decease a covered spouse, the spouse may remain on the plan by paying the full cost of individual coverage based on the current dental plan rate schedule. Eligible dependent children of the retiree may continue coverage under COBRA. 

LIFE INSURANCE - Each retiree is given the option to continue employee and dependent life insurance according to the provisions of the current group life insurance contract upon retirement.  Retirees with 25 or more years of service working for the Town of Cary are provided with $10,000 of life insurance at no cost to the qualified retiree. 

GRANDFATHERED SERVICE CREDIT PROVISION - Current employees hired before December 15, 2005 will be allowed to apply a portion of the service credit from a previous NC local or state government agency in determining the amount of the retiree’s subsidy according to the provisions of the policy adopted May 23, 1996.