HomeMy WebLinkAboutIR 9278 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9278
To the Mayor and Members of the City Council July 20, 2010
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SUBJECT: APPLICATION FOR AN EARLY RETIREE REINSURANCE
1715 PROGRAM FUNDING
This informal report is to inform the City Council about staffs submission of an application for an
Early Retiree Reinsurance Program Grant. The program offers employers' assistance in
providing affordable healthcare to non-Medicare eligible (pre-65) plan participants.
The Early Retiree Reinsurance Program was established by section 1102 of the Patient
Protection and Affordable Care Act (the Affordable Care Act), P.L. 111-148, enacted on March
23, 2010. Congress approved funding of$5 billion dollars to reimburse qualified employers for a
portion of the cost of early retiree health benefits (age 55 to 64) for certain claims between
$15,000 and $90,000. There are about 1,400 City of Fort Worth retirees which meet these
criteria (54 percent of all retirees).
In FY 2010, the City will pay roughly $20 million dollars for retiree healthcare benefits. The City
will use the reimbursements to help reduce its health care cost over the term of the agreement
and help offset the $103 million dollar GASB-45 Annual Required Contribution.
Funds received may not be used as general revenue by the City of Fort Worth and no matching
funds are required by the City.
Health and Human Services (HHS) released the final application on June 30, 2010. Funding will
be granted in the order received once approved. Once the application is approved, staff will
request approval by the City Council to accept these funds.
Staff estimates reimbursements will range between $1.5 to $2.0 million dollars for FY 10 and $2.5
to $3.5 million dollars in FY11; or $4.7 million dollars by December 31, 2011. HHS anticipates
that the $5 billion will be distributed by mid-2011 and anticipates that funds will not be available
after 2011.
If you have any questions, please contact Margaret Wise, Assistant Director of Human
Resources, at (817) 392-8058.
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Dale A. Fisseler, P.E.
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS