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z <br /> permanent employee, if that employee is age 65 or older or retiring on <br /> a disability retirement. For such retirees on the County's group health <br /> insurance plan, the County contribution, on a prorata basis, would be <br /> 50 percent of the cost for individual coverage and 20 percent of the <br /> cost of dependent coverage, if any. For an employee age 65 or older, <br /> the County contribution would be 50 percent of the Medicare <br /> Supplement cost for the retiree. <br /> This proposal arises from employee concern and feedback that an <br /> employee who does not have 10 years service and who is age 65 or <br /> older likely will not be able to complete 10 years of service before <br /> retirement. Also the concern that an employee retiring on disability <br /> has a critical need to continue health insurance coverage but may not <br /> be able to work the 10 years with Orange County necessary to qualify <br /> for full coverage. <br /> If the County extended retiree health insurance eligibility to employees <br /> age 65 or older with five but less than 10 years County service, <br /> Personnel's records indicate that three current employees would be <br /> eligible for such coverage in 1997-98. If all three employees elected <br /> to retire in 1997-98, the estimated additional annual cost of this <br /> coverage is about$5.000. Personnel reviewed employee records and <br /> also projected eligibility over the next five years. This identified only <br /> one additional current employee who would be eligible under this <br /> provision. <br /> Over the past five years the County has averaged about two disability <br /> retirements a year. If the County extended retiree health insurance to <br /> employees retiring on a disability retirement with five but less than 10 <br /> years County service and if the average two disability retirements both <br /> were employees with less than 10 years service, the estimated <br /> additional annual cost is about$7,500. <br /> Funds to cover any increase in cost first would be charged to the <br /> funds budgeted for retiree health insurance in 1997-98. If sufficient <br /> funds to cover the increase in cost were not available from those <br /> funds, then these costs could be funded from funds realized by the <br /> operating department when an employee retires and the position is <br /> filled at a lower salary level. <br /> Recommendation: The Manager recommends the Board adopt the Attachment 1 <br /> amendment to the Orange County Personnel Ordinance effective <br /> September 1, 1997. <br /> McVetabs.doc <br /> August 14, 1997 <br />