HEALTH CARE BENEFIT PLAN

Ann Arbor City Code tit. I, ch. 21, pt. B

in effect

Ann Arbor City Code § 1:717 Eligibility.

1:717. - Eligibility. In order to be eligible for post-retirement health care benefits during any Plan Year, an individual must: (1) be a Retiree of the City who on the date of retirement from the City elects to receive coverage from the Plan; and (2) Have been a Participant of this Plan, or (3) Be a Spouse of an individual who meets the eligibility requirements above, provided that the Spouse remains legally married to the Participant/Retiree during the Participant's/Retiree's lifetime and that, in the case of a surviving Spouse, the Retiree had either: (a) A contractual agreement with the City to provide health benefits at retirement which included the right to name a beneficiary, or (b) Elected an Option II or Option III form of retirement and nominated his or her surviving Spouse as beneficiary of the option benefit (the surviving Spouse benefit shall not terminate upon remarriage; however coverage shall not extend to the surviving Spouse's successive Spouse and/or Dependents); or (4) Be a Child-Dependent of an individual who meets the eligibility requirements above; and in the event of the Retiree's death, the Retiree had either (a) A contractual agreement with the City to provide health benefits at retirement which included the right to name a beneficiary, or (b) Elected an Option II or Option III form of retirement, and there is a surviving Spouse or surviving Dependent as named beneficiary; or (5) Be a Sponsored Dependent of an individual who meets the eligibility requirements above, provided that the Retiree bears the cost during Retiree's lifetime and that, in the event of the Retiree's death, the Retiree had either (a) A contractual agreement with the City to provide health benefits at retirement which included the right to name a beneficiary and there is a surviving named beneficiary, or (b) Elected an Option II or Option III form of retirement and there is a surviving named beneficiary and the cost is not born by the Plan and Trust; or (6) Be a Family Dependent of an individual who meets the eligibility requirements above, provided that the Retiree bears the cost during Retiree's lifetime and that, in the event of Retiree's death, the Retiree had either (a) A contractual agreement with the City to provide health benefits at retirement which included the right to name a beneficiary and there is a surviving named beneficiary, or (b) Elected an Option II or Option III form of retirement and there is a surviving named beneficiary and the cost is not borne by the Plan and Trust; or (7) Be a Domestic Partner of an individual who meets the eligibility requirements above, subject to the provisions of the City Code, City Council resolutions and/or Collective Bargaining Agreement(s); or (8) Be the surviving Spouse, Child-Dependent, or Domestic Partner of a former Participant, who on the date preceding the individual's date of death, was an employee; provided, the surviving Spouse, Child-Dependent, or Domestic Partner is eligible for duty death and/or non-duty death benefits payable from the Retirement Plan; or (9) Be an individual granted health coverage under a settlement agreement between the City and the individual; or (10) Be an individual granted health coverage under a court order, provided (a) That the individual produces satisfactory documentation at the time of application for benefits; and (b) That the City reserves the right to challenge the validity of the court order and that if such a challenge proves successful that the cost of any benefits provided be reimbursable to the Trust; or (11) Be a Retiree, Retiree's Spouse or Child-Dependent who was in receipt of benefits at the time of the effective date of this Plan. Notwithstanding anything to the contrary in Chapter 21 or other chapters of the City's Ordinance, a Non-Subsidized Retiree may voluntarily elect coverage under the Plan upon becoming eligible to participate, provided that he/she shall bear the entire premium or contribution cost (without any subsidy from the City) for his/her coverage (and his/her eligible Dependents' coverage) under the Plan, which costs are determined by the City. (Ord. No. 41-98, § 1, 10-19-98; Ord. No. 11-13, § 4, 8-4-11)

Ann Arbor City Code § 1:718 Commencement of benefit.

1:718. - Commencement of benefit. Subject to all applicable provisions of the Plan and/or insurance agreement, a participant shall commence eligibility for benefits from the Plan on the first day he or she satisfies the eligibility requirements of section 1:717, provided the participant has enrolled for coverage on such date. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:719 Enrollment.

1:719. - Enrollment. (1) The City shall give each Participant timely written notice of his or her eligibility and his or her right to enroll for coverage under the Plan. A Participant or Retiree may enroll for coverage on a form or forms provided by and filed with the City. In connection with his or her enrollment for coverage, the Participant or Retiree shall furnish all pertinent information requested by the City, Plan Administrator and/or the Insurance Carrier, including but not limited to the names, relationships and birth dates of the participant's or Retiree's Spouse and eligible Dependents, and any pertinent Medicare Part A and B information of any Participant, Retiree, Spouse and/or eligible Dependent, and the Plan Administrator or the Insurance Carrier may rely upon all such forms and information furnished. (2) Spouse and Dependents shall be eligible for coverage as provided in the Plan and/or insurance agreement and in section 1:717 above. Spouse and Dependents shall be enrolled for coverage under the Plan by the Participant or Retiree at the time the Participant or Retiree enrolls for coverage under the Plan, during an open enrollment period, or as provided for in subsection (3). (3) Participants or Retirees must report major life event changes to the City within 30 days of the event in order to add or delete persons from their benefit Plans (health and life insurance). Major life event changes may impact eligibility for benefits. Notification beyond 30 days of the event will delay any additions of persons to benefits until the next open enrollment period. If failure to report the event within 30 days results in additional benefit costs by the Plan and Trust due to non-termination of benefits, the Participant or Retiree may be held responsible for such costs. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:720 Termination of benefits.

1:720. - Termination of benefits. Except as provided in section 1:721, participation in the Plan shall terminate in accordance with the Plan and/or Insurance Agreement, applicable Collective Bargaining Agreement or City Personnel Rules and Regulations, on the earliest of: (1) Termination of the Plan; (2) Non-payment of any required Participant or Retiree contributions; (3) Death of the individual receiving benefits under the Plan; (4) A Participant's or Retiree's election to cease coverage under the Plan; (5) In the case of a Spouse or Dependent, the date the Spouse or Dependent ceases to be a Spouse or Dependent as defined in this Plan; or (6) In the case of a Spouse, Dependent, family Dependent or sponsored Dependent, death of the Retiree if the Retiree elected straight life, straight life equivalent or the Option I form of retirement at the time of retirement or if the Retiree failed to nominate the required beneficiary necessary to ensure coverage of the Spouse, Dependent, family Dependent or sponsored Dependent; or (7) In the case of a Retiree, if that individual had a contractual agreement with the City to provide health benefits at retirement which did not include the right to name a beneficiary, or if the contractual agreement did include the right to' name a beneficiary, and the Retiree failed to nominate the required beneficiary to ensure coverage of the Spouse, Dependent, family Dependent or sponsored Dependent; or (8) In the case of a Retiree, if that individual assumes employment elsewhere and that employer provides health coverage to its employees which does not substantially differ from that offered by the Plan; provided that should the Retiree lose such coverage from the other employer for any reason, including voluntary or involuntary separation of employment, upon production of proof of such loss to the City, the City's obligation to provide health coverage under the Plan shall recommence immediately upon the satisfactory production of such proof-of-loss; or (9) In the case of a Domestic Partner, the date the Domestic Partner ceases to be a Domestic Partner as defined in this Plan. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:721 COBRA continuation coverage.

1:721. - COBRA continuation coverage. Notwithstanding the provisions of section 1:720, continuing coverage shall be provided under the Plan to Participants, Retirees, their Spouses and Dependents in accordance with Internal Revenue Code provisions (currently Section 4980B, and Title XXII of the Public Health Services Act ("COBRA continuation coverage"), as amended). The terms of such COBRA continuation coverage are described below: (1) COBRA continuation coverage shall be offered under the following circumstances ("qualifying events") if participation under the Plan ordinarily would terminate as a result of such circumstances: (a) The Participant's or Retiree's divorce or legal separation; (b) Death of the Participant, Retiree, Spouse, or Dependent; (c) A Dependent child, ceasing to qualify as a "Dependent" eligible for coverage under the terms of the Plan; (d) A Participant or Retiree becoming entitled to benefits under Title XVIII of the Social Security Act; (e) The commencement by the City on or after July 1, 1986 of a Title 11 bankruptcy proceeding; or (f) Entitlement is specified in an applicable Collective Bargaining Agreement or City personnel rules and regulations. (2) COBRA continuation coverage shall be offered only to the Participant or Retiree and/or his or her Spouse and his or her Dependents who were covered under the Plan on the day before the qualifying event occurred and who loses coverage under the Plan on account of the qualifying event ("qualified beneficiaries"). The qualified beneficiary shall be entitled to elect only the type of coverage that he or she was receiving under the Plan at the time of the qualifying event. The qualified beneficiary may elect to change his or her type of coverage during an open enrollment period. Such an election does not alter in any way the Participant's or Retiree's entitlement for, or the terms of, COBRA continuation coverage. (3) In the case of qualifying events described in subsection (1)(a) or (c) above, the Retiree or his or her family must notify the City of the qualifying event within 60 days of the date of the event. In all other cases, the City shall be deemed to be notified of the qualifying event. Within 14 days of such notification, the City shall provide the Retiree and/or his or her family with a notice of the right to elect COBRA continuation coverage. Any such notification to an individual who is a qualified beneficiary as a Spouse of a Retiree shall be treated as notification to all other qualified beneficiaries residing with such Spouse at the time such notification is made. (4) The Participant, his or her Spouse, or his or her Dependent may elect COBRA continuation coverage within 60 days after the later of the date of the qualifying event, or the date of the notice from the City to the qualified beneficiary. Each qualified beneficiary may make a separate election for COBRA continuation coverage. If an election is made within the 60-day period, the Plan shall permit payment for COBRA continuation coverage during the period preceding such election to be made not less than 45 days after the date of the election. If the election to continue coverage is not made within the above 60-day period, then no further opportunity to continue shall be extended to the Retiree, his or her Spouse or his or her Dependents. (5) In the case of subsection (1)(a) through (d), COBRA continuation coverage may continue for up to 36 months. In the case of subsection (1)(e), coverage may continue: (a) Until the death of the Retiree or of any qualified beneficiary who, on the day before the qualifying event, was a surviving Spouse of the Retiree covered under the Plan; or (b) In the case of a surviving Spouse or Dependent child of the Retiree, for up to 36 months after the death of the Retiree. Notwithstanding the continuation periods specified above, COBRA continuation coverage shall be modified as follows: 1. COBRA continuation coverage shall terminate with respect to a qualified beneficiary upon the earlier of: (A) The date on which the City ceases to provide any group health Plan to any employee; (B) The date upon which coverage under the Plan ceases as a result of failure to make timely premium payments as required by section 1:721(6); premium payments shall be considered timely if made within 30 days of the due date; however, coverage shall be terminated retroactively as of the date if payments are not received within 30 days; non-sufficient fund checks are not payment; (C) The date upon which the qualified beneficiary becomes covered under any other group health Plan (as an employee or otherwise) if such Plan does not contain an exclusion or limitation with respect to any preexisting condition of such qualified beneficiary; or (D) The date upon which the qualified beneficiary becomes entitled to Medicare benefits. 2. COBRA continuation coverage shall be continued for a period of 36 months in the event of multiple qualifying events. (6) The Plan shall require payment of a premium for any period of COBRA continuation coverage in an amount that shall not exceed 102% of the cost to the Plan for such period of coverage for Retirees, Spouses or Dependents receiving benefits under the Plan with respect to whom a qualifying event has not occurred. The cost to the Plan for coverage shall be determined for a period of 12 months selected by the Plan and shall be determined before the beginning of such period. The qualified beneficiary may elect to make any required premium payments in monthly installments. (7) COBRA continuation coverage is not conditioned upon evidence of insurability. (8) If there is a conflict between this section and the Internal Revenue Code provisions (currently Section 4980B, and Title XXII of the Public Health Services Act ("COBRA continuation coverage"), as amended), the Internal Revenue Code provisions prevail. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:722 Conversion privilege.

1:722. - Conversion privilege. An individual who is no longer eligible to receive benefits under the Plan (as a Spouse, Dependent or COBRA qualified beneficiary) may, if permitted by and in accordance with the terms of the Plan and/or insurance agreement, convert his or her coverage under the Plan to an individual medical expense policy with the Plan administrator and/or the insurance carrier, without the necessity of a medical examination and with no interruption in coverage. The cost of such individual conversion coverage shall be paid solely by the affected individual. Application for individual conversion coverage must be made to the City and/or Plan Administrator in accordance with the Plan and/or to the insurance carrier in accordance with the insurance agreement. A COBRA qualified beneficiary must be given notification of this conversion privilege during the 180-day period ending on the expiration of the qualified beneficiary's COBRA continuation period. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:723 Health care benefits, general.

1:723. - Health care benefits, general. Beginning on the effective date, the City shall provide health care benefits to each eligible Retiree and, if elected, to his or her eligible Dependents. The benefits provided under the Plan are those set forth in the Plan and/or insurance agreement, Collective Bargaining Agreements and the City Personnel Rules and Regulations. The insurance agreement(s), Collective Bargaining Agreements and City Personnel Rules and Regulations are incorporated herein by this reference. A complete description of benefits provided under the Plan, inclusive of those set forth in the Collective Bargaining Agreements and City Personnel Rules and Regulations, shall be maintained by the City or the Plan Administrator. In accordance with the Plan and/or insurance agreement with the insurance carrier and subject to sections 1:707 and 1:720, Subsidized Retirees and their eligible Dependents will be entitled to the benefits in effect at the time of the Subsidized Retiree's retirement ("Base Plan"). These benefits may be provided under the same policy or program in place at the Subsidized Retiree's retirement or under a substantially equivalent policy or program at the discretion of the City. All Subsidized Retirees, and/or eligible Dependents who were in receipt of retiree health care benefits at the time of enactment of this Plan and Trust shall continue to be eligible for the same benefits. In accordance with the Plan and/or insurance agreement with the insurance carrier and subject to sections 1:707 and 1:720, Non-Subsidized Retirees may voluntarily enroll themselves and their eligible Dependents for coverage under this Plan when they first become eligible for retiree coverage pursuant to section 1:717; such enrollment must be accomplished in the manner and by the deadline established by the Plan Administrator and the terms of the Plan. Non-Subsidized Retirees will be solely responsible to pay for their (and their eligible Dependents) premium or contribution cost of coverage under the Plan. The City will not subsidize or pay for a Non-Subsidized Retiree's cost of such voluntarily elected coverage (provided, however, that a Non-Subsidized Retiree could use a retiree health reimbursement account balance, to the extent one is available and as permitted by law, to pay for his/her cost of coverage under the Plan). (Ord. No. 41-98, § 1, 10-19-98; Ord. No. 11-13, § 5, 8-4-11)

Ann Arbor City Code § 1:724 Alternative policies or programs.

1:724. - Alternative policies or programs. The City, in its discretion, in addition to the Base Plan, may offer alternative policies or benefit structures to Participants, Retirees, Spouses and/or Dependents. Participants or Retirees and their Spouses and/or Dependents may transfer from one policy or benefit structure to another policy or benefit structure during open enrollment periods. However, any additional cost above the Base Plan shall be borne by the Participant or Subsidized Retiree or the Participant's or Subsidized Retiree's Spouse and/or Dependents (Non-Subsidized Retirees bear the entire cost of the Base Plan or any alternative policies or benefit structures made available to them and voluntarily elected by them and/or their eligible Dependents. (Ord. No. 41-98, § 1, 10-19-98; Ord. No. 11-13, § 6, 8-4-11)

Ann Arbor City Code § 1:725 Duplicate coverage disallowed.

1:725. - Duplicate coverage disallowed. Duplicate coverage will not be provided in the event that there are 2 or more Participants and/or Retirees who (a) are each independently eligible for health care benefits from the City or the Plan and (b) are each also eligible for health care benefits from the City or the Plan as a Spouse or Dependent of a Participant or a Retiree, said parties shall be eligible to participate in only 1 policy or program so that 1 party participates in the 1 policy or program as the principal insured and the other party(ies) participates in the same policy or program as a Spouse or Dependent of the Participant or Retiree. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:726 Medicare eligibility.

1:726. - Medicare eligibility. Unless otherwise stated below, upon attaining the age of Medicare eligibility, all eligible Retirees and/or Spouses shall enroll in both Medicare A and B, and are obligated to pay for Medicare Part B. Once a Retiree is in receipt of Medicare A and B coverage, this Plan will provide complementary coverage as provided pursuant to any applicable Collective Bargaining Agreement and/or the coverage in effect at the time of retirement. A Retiree and/or Spouse is obligated to take Medicare Part A if he/she has reached the age of Medicare eligibility and has 40 covered quarters, or if he/she has a Spouse with 40 covered quarters who has reached the age of Medicare eligibility, and can obtain Medicare Part A without any cost to the Retiree or Spouse. In the event a Retiree or Spouse is not eligible for Medicare Part A without any cost to the Retiree or Spouse, and provides proof of same to the Plan Administrator, Retiree or Spouse shall be eligible for continued health care coverage at the same benefit level under the Plan as if the Retiree or Spouse has not attained the age at which Medicare eligibility is determined. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:727 Coordination of benefits

1:727. - Coordination of benefits The City intends that the Plan shall provide each Retiree with payment for health care expenses incurred by the Retiree and, if eligible, his or her Spouse and his or her Dependents, as provided in the Plan and/or insurance agreement. The City does not intend that payment under this Plan shall exceed the amount of the expense incurred. For this reason, the Plan coordinates benefits with other insurance policies according to industry standards and applicable laws. (1) Reimbursement. If an expense is paid under the Plan by the Plan Administrator on behalf of a Retiree, his or her Spouse or Dependents, and such expense subsequently is paid from any other source, in whole or in part, the Retiree, his or her Spouse or Dependents, shall remit to the Plan an amount equal to the duplicated benefits. In addition, the Plan Administrator may reimburse any other Plan, person or entity that has paid an expense on behalf of a Retiree, his or her Spouse or Dependents which expense was payable under this Plan. In such event, the Plan, Plan Administrator and/or the insurance carrier shall be relieved of all further responsibility with respect to that expense. (2) Subrogation. In the event any payment is made by the Trust under the Plan, the Plan and the Trust shall be subrogated and shall succeed to the rights of any Retiree, his or her Spouse and Dependents against any other Plan, person or entity for recovery of health care expenses for which such other Plan, person or entity legally is liable. All amounts so recovered, by settlement, judgment or otherwise, shall be paid to the Trust. Retirees, their Spouses and Dependents shall furnish such information, execute and deliver such assignments, documents or other instruments, and take whatever steps are necessary to secure the rights of the Plan. Retirees, their Spouses and Dependents shall take no action to prejudice the rights and interests of the Plan hereunder. (3) Effect of exclusions. The provisions of this section shall not be construed to create any independent right to payment of any benefit under this Plan. Any exclusion or limitation contained in the Plan or Plan and/or insurance agreement shall supersede any provision of this section regarding coordination of benefits. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:728 Life insurance benefits, general.

1:728. - Life insurance benefits, general. Beginning on the effective date, the City shall provide basic life insurance benefits to each eligible Retiree according to an amount provided in the applicable Collective Bargaining Agreement or the City personnel rules and regulations in effect at the time of retirement. The Collective Bargaining Agreements and City personnel rules and regulations provisions related to life insurance are incorporated herein by this reference. A complete description of life insurance benefits provided under the Plan, inclusive of those set forth in the Collective Bargaining Agreements and City personnel rules and regulations, shall be maintained by the City or the Plan Administrator. Subject to all applicable provisions of the Plan and/or insurance agreement(s), each eligible Retiree must designate a beneficiary(ies) with the City. The death of the Retiree must be reported to the City. Upon notification, the designated beneficiary(ies) must complete a "proof of death claim" form and submit this with a certified copy of the death certificate to the City. Documentation will be forwarded by the City to the insurance carrier for processing and payment of the death benefit to the designated beneficiary(ies). All Retirees eligible for life insurance benefits at the time of enactment of this Plan and Trust shall continue to be eligible for the same benefits. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:729 Plan administration, City duties.

1:729. - Plan administration, City duties. (1) The City shall be responsible for complying with the Code's reporting and disclosure requirements and for the purpose of fulfilling such other Plan administrative functions as are not specifically assigned to the Plan Administrator and/or insurance carrier. The City may employ a Plan Administrator and/or insurance carrier who will be responsible for the interpretation, administration and the payment of health care claims under the Plan. (2) The City also shall be responsible for the performance of its duties as employer and Plan sponsor under applicable Internal Revenue Code Sections. The City may delegate all or any part of its Plan administration responsibilities. Any such delegation shall be done in writing. (3) The City may employ 1 or more persons to render advice with regard to any responsibility such fiduciary has under the Plan. Any fiduciary, agent, representative or other person performing services to or for the Plan shall be entitled to reasonable compensation for services rendered, unless such person is employed by the City and already receives full pay from the City, and to reimbursement or expenses properly and actually incurred. (4) The City shall furnish the Plan Administrator and/or insurance carrier, while this Plan is in effect, any information as may be required, at intervals and in the form prescribed by the Plan Administrator and/or insurance carrier, for the enrollment of Retirees, Spouses and/or Dependents for coverage under the Plan and for the processing of terminations or other changes in coverage of Retirees, Spouses and/or Dependents and also shall furnish to the Plan Administrator and/or insurance carrier such other information required for the administration of the Plan. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:730 Plan administration, insurance carrier duties.

1:730. - Plan administration, insurance carrier duties. Each insurance carrier shall have the responsibility for interpreting and administering their respective insurance agreement and for processing and paying benefit claims thereunder, and shall provide the City with such information as the City may deem necessary to permit the timely filing of all reports required by law. The insurance carrier also shall provide to the City, for distribution, or directly to, Retirees, Spouses and/or Dependents, a description of benefits provided under their respective insurance agreement. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:731 Plan administration, Plan administrator duties.

1:731. - Plan administration, Plan administrator duties. The Plan Administrator shall have the responsibility for interpreting and administering the Plan and for processing and paying benefit claims thereunder, and shall provide the Trustees with such information necessary to permit the timely filing of all reports required by applicable laws or regulations governing the Trust. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:732 Plan administration, Retiree health care Board duties.

1:732. - Plan administration, Retiree health care Board duties. The Retiree Health Care Board shall be vested with the authority to render decisions regarding participation in the Plan. Such authority shall be specifically limited by (1) the eligibility requirements of section 1:717 or as otherwise provided for in this chapter, and (2) the City's ability to obtain coverage under the Plan and/or from the applicable insurance carrier. Appeal of the Retiree Health Care Board's decision regarding participation may be made to City Council. The Retiree Health Care Board shall have such other duties under the Trust as are set forth in Part C of this chapter. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:733 Health care benefits, claims procedures.

1:733. - Health care benefits, claims procedures. A claim for benefits under the Plan must be submitted in writing to the Plan Administrator and/or insurance carrier in accordance with procedures established by the Plan Administrator or the Plan and/or insurance carrier as communicated in writing to Retirees, Spouses and/or Dependents. The Plan Administrator and/or insurance carrier shall provide adequate notice to any participant or qualified beneficiary whose claims for benefits under this Plan have been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the party. The Plan Administrator and/or respective insurance carrier has responsibility for the resolution of disputes involving payment of benefits under the portion of the Plan assigned to the Plan Administrator or insurance agreement with the insurance carrier. The Plan Administrator and/or insurance carrier shall afford a reasonable opportunity to any participant or qualified beneficiary whose claim for benefits has been denied for a full and fair review of the decision denying the claim. (Ord. No. 41-98, § 1, 10-19-98)

Ann Arbor City Code § 1:734 Funding.

1:734. - Funding. For the purpose of creating and maintaining the Plan and Trust for the payment of benefits payable as provided in this chapter, the City shall appropriate an amount sufficient to maintain the Trust subject to the provisions of section 1:734(1) and Part C of this chapter. (1) Applicable Minimum Cost Requirement. During the City's tax year in which a Qualified Transfer pursuant to section 1:595(1) of the retirement ordinance occurs after December 17, 1999, and for the following 4 tax years, the City shall pay for retiree health care costs an amount which is not less than the higher of the Applicable Employer Retiree Health Cost for each of the 2 years immediately preceding the year of the Qualified Transfer. (a) Cost Maintenance Period. For purposes of this section, the term "Cost Maintenance Period" means the period of 5 taxable years beginning with the taxable year in which the Qualified Transfer occurs. (b) Applicable Employer Retiree Health Cost. For purposes of this section, the term "Applicable Employer Retiree Health Cost" with respect to any taxable year means the amount determined by dividing: (i) The Qualified Current Retiree Health Liabilities as defined in Code Section 420(e)(1)(A) for the year, by (ii) The number of individuals who (immediately before the Qualified Transfer or, if there was no Qualified Transfer, as of the end of the taxable year) were entitled to retiree health care benefits. (2) Election to Compute the Applicable Employer Retiree Health Cost Separately. The City may elect to apply the Applicable Employer Retiree Health Cost requirement described in (1)(b) above separately with respect to Retirees and other Qualified Beneficiaries who are eligible for Medicare and those Retirees and other Qualified Beneficiaries who are ineligible. (3) Applicable Minimum Health Benefit Requirement. During the City's tax year in which a "Qualified Transfer" pursuant to section 1:595(1) of the retirement ordinance occurred before December 17, 1999, and for the following 4 tax years, the City's retiree health benefits provided during the Health Benefit Maintenance Period shall be substantially the same but in no event less than the retiree health benefits provided during each of the 2 taxable years immediately preceding the year of the Qualified Transfer. For purposes of this section the term "Health Benefit Maintenance Period" means the period of 5 taxable years beginning with the taxable year in which the Qualified Transfer occurs. (4) Election to Apply the Applicable Retiree Health Benefit Separately. The City may elect to apply the Applicable Retiree Health Benefit requirement separately with respect to Retirees and other Qualified Beneficiaries who are eligible for Medicare and those Retirees and other Qualified Beneficiaries who are ineligible. (Ord. No. 41-98, § 1, 10-19-98; Ord. No. 09-21, § 1, 6-15-09)

Source: City of Ann Arbor, Michigan, Code (Municode Library, library.municode.com)URL: https://library.municode.com/mi/ann_arbor/codes/code_of_ordinances?nodeId=TITIAD_CH21REHECABEPLTR_PTBHECABEPLFetched: 11/8/2026