PowerPoint Presentation

Council Item of Special Interest  
Retiree Healthcare
February 27, 2024

Scope of Work
2
• History of Retiree Health
– 7/1/2013 Discontinued Subsidizing 
– 07/01/2018 Discontinued offering retiree coverage to 
new retirees
• What we currently offer to new retirees
• Proposed Retiree Health Care Plans

History of Retiree Health 
3
• July 1, 2013 
– City stopped subsidizing retiree healthcare premiums
• April 17, 2018 - Budget Workshop
– Council discussed the financial impact of the retiree 
health and other options for retirees
• July 1, 2018 
– Discontinued offering retiree health to new retirees

What We Currently Offer
4
• Retiree Health Reimbursement Account
– Post retirement account more commonly referred to as a 
Health Reimbursement Account (HRA) 
• City Wide Plan - Non-Sworn 
– 100% of Sick Leave paid at 50% avg. hourly rate plus Vacation hours 
above 160 paid at current hourly rate at retirement
• FOP Plan 
– 100% of Sick Leave paid at 50% avg. hourly rate at retirement
– Employee contributes 1% from years 8-15 and 2% 16 years +
• Fire MOU
– 100% of Sick Leave paid at 50% avg. hourly rate at retirement
– Union members receive $125.00 per pay period into their HRA

Average Payout At Time Of Retirement
5
Assumption:  Eligible to retire January 2024 with 20 years of service.  
Sick Payout
Vacation Payout HRA Balance
UFFT
Total
City-Wide 
Plan
$30,791
$12,825
N/A
N/A
$43,616
FOP Plan
$22,398
N/A
$13,683
N/A
$36,081
Fire MOU 
Plan
$17,668
N/A
$51,838
$2,000
$71,506

Average Cost of COBRA
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• COBRA is the same plan as active employees.  
Full cost plus 2% Administration fee.
• Medical Only (Average Cost)
– Emp Only = $592.76  
 
– Emp + One = $1,195.47 
– Emp + Fam = $1,908.20 
• Average payout covers the cost of COBRA on any 
tier for up to 18 months.
•
*Rates include ASRS/PSPRS Subsidy

Brown & Brown Consulting
7
• Retiree Health Plan Model
– Retiree Eligibility
– Benefit Offerings
– Rate Summary
– Financial Analysis
• Benefit Obligations
• 20 Year Projection

Retiree Eligibility
8
Retiree eligibility requirements
• Analysis conducted based on retirement with at least 
20+ years of service (at least 10 years with Glendale 
immediately prior to retirement)

Benefit Offerings
9
Coordination of Benefits Model 
Pre-Medicare
Plan offering
Same Medical/Dental/Vision plans as Actives
Plan Subsidy
Individual coverage: $464/month
Family coverage: $1,040/month
Medicare
Plan offering
Same Medical/Dental/Vision plans as Actives; Medical benefits coordinate with Medicare
Plan Subsidy
Individual coverage: $464/month
Family coverage: $1,040/month
• Analysis reflects plan offerings and employer subsidy model currently utilized by City of Mesa 
Comments/Considerations:
• Plan subsidies reflect current maximum contributions by City of Mesa for retiree coverage
• Familiarity for retirees with current plan offerings – including provider access
• Can be significantly more costly than other options available in the retiree market
• Employer Group Waiver Plan (EGWP) offered to Medicare-eligible retirees for Rx coverage instead of continuing active Rx plan

Rate Summary
10

Financial Analysis 
11
Benefit Obligation (Actives as of July 1, 2024)
75% Participation Rate
100% Participation Rate
OPEB Liability
$238,320,000
$317,760,000
OPEB Expense
$23,195,000
$30,927,000
• Retiree-only rates developed based on claims experience for Glendale’s active plans and age-adjusted
• Plan subsidies assumed to be $464 and $1,040 (Individual/Family)
• Balance sheet liabilities shown above reflect multiple assumptions:
Assumes trend applied to the plan subsidy
6.5% annual trend grading to 5.0% over seven years
Participation rates for retirees meeting eligibility requirements upon retirement:
75%
100%

Financial Analysis – 20-year Projection
12

Pre-65 Compared to ASRS
13
Glendale Pre-65
Single
Single +1
Family
EPO
$735.03
$1398.05
$2747.08
PPO
$598.70
$1125.43
$2338.13
HDHP
$330.51
$589.03
$1533.55
ASRS Pre-65
Single
Single +1
Family
Plus PPO
$1,258.00 
$2,556.00 
$3,682.00 
Premier
$982.00 
$2,004.00 
$2,910.00 
Value
$736.00 
$1,512.00 
$2,221.00 
Economy
$510.00 
$1,060.00 
$1,588.00 
Assumes all applicable subsidies

Post 65 Compared to ASRS
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*Assumption is all enrollees are Medicare Eligible
Glendale Post-65
Single
Single +1
Family
EPO
$541.18
$1010.32
$2165.50
PPO
$427.90
$783.79
$1825.69
HDHP
$205.98
$339.95
$1159.93
ASRS Post-65
*Single
*Single +1
*Family
Advantage HMO
$0.00
$0.00
$48.10
Advantage PPO
$14.25
$58.50
$172.75
Assumes all applicable subsidies

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QUESTIONS?
QUESTIONS?