Defined Benefi Retiree Health Plan

[luissaha]

I'm new to the governmental plan area, and am having trouble wrapping my head around a defined benefit retiree health plan offered by a city.  The municipal code provides a retiree is entitled to obtain health care coverage under any city-sponsored plan, or any other health plan of their choice, and will be reimbursed for health care premiums subject to certain limits.  The code goes on the prescribe reimbursement rates based on length of service.  The reimbursements are made out of the city's general assets.  I believe the reimbursed amounts are not included in retirees' gross income under section 106 of the Code.

My concerns/questions are there really is no plan document or plan summary available to retirees that sets forth rules for what expenses might not be reimbursed, or how reimbursement amounts are calculated.  For example, it is my understanding certain retirees are obtaining coverage through their working spouses' plans and are seeking reimbursement for the cost difference between employee-only coverage and employee plus spouse coverage.  Is this allowed under the Code?  I can see if the employee bought coverage through the city's plan for himself/herself and spouse that the city would reimburse the employee-only rate (or if the retiree went out and bought other coverage for himself and spouse), but I'm not sure if coverage is obtained the spouse's plan.  What if the the spouse uses flex credits under 125 plan to pay to add retiree?  Isn't this "double-dipping" so the reimbursement would be income to the retiree?  Shouldn't this all be explained to retirees in some sort of plan summary?

 

[Carol V. Calhoun]

A defined benefit plan always requires a written plan document.  In many instances, that document may be embodied in a statute or regulations.  But it has to exist.  You may want to ask your HR department how to get a copy.

A summary plan description is not required in the case of a governmental plan.