Los Angeles Municipal Code Art. 2 Tier 1 Provisions

(Title amended by Ord. No. 184,134, Eff. 1-22-16.)

Section

For purposes of this Article 2, the following words and phrases shall have the meaning ascribed to them in this section:

Employee shall refer to an employee who is a member of Tier 1 of LACERS.

Member shall refer to a person who is a member of Tier 1 of LACERS. Effective February 21, 2016, a part-time employee Member who qualifies for membership under Section 4.1002 of this Code shall be eligible for a benefit under this Article 2 when the Member is age 55 with a minimum of ten years of Service, provided that the Member is receiving a service retirement benefit or disability retirement benefit from LACERS under Chapter 10. After calculating the first ten years of Service, a part-time Member’s health subsidy shall be calculated using Service Credit, which shall be prorated based upon the number of hours the Member worked per pay period. However, employees who became Members of the LACERS prior to April 23, 1990, whose health subsidy is based on periods of part-time and less than full-time employment, shall receive a health subsidy based on Service, and not pro-rated.

Retired Employee or Retiree shall refer to a person who is a retired Member of Tier 1 of LACERS and is receiving either a service retirement allowance or a disability retirement allowance pursuant to the provisions of Article 1 of Chapter 10 of Division 4 of this Code.

Service. Effective February 21, 2016, only those periods during which a Member (1) received compensation from the City as an

employee, or (2) during which the employee both received Workers’ Compensation benefits (Div. IV, California Labor Code) for temporary disability on account of any injury or illness arising out of, and in the course of, employment with the City, and made contributions to the Retirement Fund as provided in Charter Section 1162. Service shall exclude service purchased pursuant to the Public Service Buy Back (PSB) program set forth in Section 4.1019. Service purchased pursuant to the redeposit program set forth in Section 4.1018, and Service purchased pursuant to the back contributions program set forth in Section 4.1017 may be used to qualify for the benefits provided in this article, provided that such service is purchased while a Member of LACERS and does not exceed any limits imposed under federal tax law. Part-time employee Members shall receive full, rather than pro-rated, Service for purposes of qualifying for benefits under this article.

Service Credit. Effective February 21, 2016, Service Credit shall include any Service authorized by Chapter 10 of Division 4 of this Code that may be taken into consideration for purposes of qualifying for benefits provided in Chapter 10, excluding any purchased service purchased pursuant to the Public Service Buy Back (PSB) program set forth in Section 4.1019, and provided that any such service credit does not exceed any limits imposed under federal tax law. Part-time employee Members shall have their Service Credit pro-rated based upon the number of hours worked per pay period for purposes of the calculation of their benefits under this article.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13.

Amended by: Ord. No. 184,134, Eff. 1-22-16; In Entirety, Ord. No. 188,756, Eff. 11-16-25.

The medical plan premium subsidy will be provided upon the conditions set forth below in order to lessen or defray part or all of the cost of medical plans to eligible retirees, as hereinafter defined.

(a) Eligibility for Medical Plan Premium Subsidy. A retiree who is enrolled in plan(s) administered by the Board as part of the

Medical Plan Program, and who is retired pursuant to Chapter 10 of Division 4 of this Code, shall be eligible for a medical plan premium subsidy as provided in Subsection (d) or Subsection (e), as applicable.

(b) Maximum Medical Plan Premium Subsidy. The maximum monthly medical plan premium subsidy for retired employees is

$1,190.00. Beginning July 1, 2011, the Board, in its discretion, may change, by resolution, the maximum monthly amount of the medical plan premium subsidy provided to employees retired on or before June 30, 2011, so long as any increase:

(1) Does not exceed the dollar increase in the Kaiser two-party non-Medicare Part A and B premium; and

(2) The average percentage increase for the first year of the increase and the preceding two (2) years does not exceed the

average assumed actuarial medical trend rates for the same period.

Any change made by the Board that exceeds the limits set forth in Subsection (b)(1) or (b)(2) herein must be submitted for Council review accompanied by an actuarial report. Any increases that are not acted upon by the Council within thirty (30) days after receipt of the report to Council for consideration of the increase are deemed approved. Should the Council reject the subsidy set by the Board, the Council shall determine the amount, if any, by which the subsidy shall be increased and shall adopt such change by resolution.

No increases in the maximum monthly medical plan premium subsidy shall be provided to members retired on or after July 1, 2011, except that former members who terminated employment prior to July 1, 2011, and retire on or after July 1, 2011, on a deferred vested basis without returning to membership shall be entitled to discretionary increases in the maximum subsidy as provided above regardless of the date of retirement. Notwithstanding all of the forgoing, increases in the monthly medical premium subsidy provided to retirees subject to Subsection (c) shall be governed by the provisions of that subsection, regardless of the date of retirement.

(c) Vested Right to Maximum Medical Plan Premium Subsidy Increases. Notwithstanding the provisions of Subsection (b), any

member who at any time made an additional contribution to the Retirement Fund as provided in Section 4.1003, Subsection (c) of this Code shall obtain a vested right to, and the Board, by resolution, shall set, the increase in the maximum medical plan subsidy provided to such members at an amount not less than the dollar increase in the Kaiser two-party non-Medicare Part A and Part B premium.

(d) Medical Plan Premium Subsidy for Eligible Retirees without Medicare Part A. Those retirees who are receiving a service

retirement allowance or a disability retirement allowance, who either are not eligible for Medicare or do not qualify for benefits under Part A of Medicare premium free, who have at least ten (10) years of Service and who are age fifty-five (55) years or older, shall have paid to their approved medical plan carrier on their behalf the following amount:

(1) Basic Monthly Subsidy. For one (1) to ten (10) whole years of Service Credit, forty percent (40%) of the maximum

monthly medical plan premium subsidy amount established pursuant to the provisions of Subsection (b) or Subsection (c), as applicable.

(2) Additional Monthly Subsidy. For each additional whole year of Service Credit in excess of ten (10) years, add four

percent (4%) of the maximum monthly medical plan premium subsidy to the Basic Monthly Subsidy.

(3) Maximum Monthly Subsidy. No retiree shall have paid to the retiree’s medical plan carrier an amount exceeding the

maximum monthly amount established pursuant to Subsection (b) or Subsection (c), as applicable, or receive an amount in excess of the premium of the plan in which they are enrolled.

(4) Dependent Monthly Subsidy. The monthly medical plan premium subsidy shall be applied first to the retiree’s medical plan coverage with any balance applied toward the coverage of the retiree’s dependent(s).

(e) Medical Plan Premium Subsidy for Eligible Retirees Enrolled in Parts A and B of Medicare. Those retirees with at least

ten (10) years of Service who are receiving a service retirement allowance or disability retirement allowance and who qualify for benefits under Part A and Part B of Medicare, shall have paid to the medical plan carrier providing them with a Medicare supplemental or coordinated plan the following amount:

(1) Monthly Subsidy Seventy-Five Percent (75%). For one (1) whole year of Service Credit, but less than fifteen (15)

whole years of Service Credit, seventy-five (75%) of the single-party monthly premium of the approved Medicare supplemental or coordinated plan in which the retiree is enrolled.

(2) Monthly Subsidy Ninety Percent (90%). For fifteen (15) whole years or more but less than twenty (20) whole years of

Service Credit, ninety (90%) of the single-party monthly premium of the approved Medicare supplemental or coordinated plan

in which the retiree is enrolled.

(3) Monthly Subsidy One Hundred Percent (100%). For twenty (20) or more whole years of Service Credit, one hundred

percent (100%) of the single-party monthly premium of the approved Medicare supplemental or coordinated plan in which the retiree is enrolled.

(4) Dependent Subsidy. The amount of the medical plan premium subsidy which is applied toward the coverage of

dependents of a retiree enrolled in both Part A and Part B of Medicare shall not exceed that amount which may be applied toward the coverage of the dependent(s) of a retiree not enrolled in both Parts A and Part B of Medicare with the same years of Service Credit and covered by the same medical plan. If the same plan does not offer coverage for retirees who do not have both Medicare Parts A and B, the Board shall, by rule, determine the dependent subsidies in a manner that is consistent with plans that do offer both types of coverage.

Effective July 1, 2011, no increases in the amounts paid to the medical plan carriers under this Subsection (e) shall be

provided on behalf of employees retired on or after July 1, 2011, or their dependents, except that former members who terminated employment prior to July 1, 2011, and retire on or after July 1, 2011, on a deferred vested basis without returning to membership shall be entitled to increases in the amounts paid to medical carriers under this Subsection (e) for themselves and their dependents regardless of the date of retirement. Notwithstanding all of the foregoing, increases in the amounts paid to medical plan carriers provided on behalf of retired employees subject to Subsection (c) herein shall be governed by the provisions of this Subsection (e) regardless of the date of retirement.

(f) Medicare Enrollment and Assignment. Retirees who are eligible to enroll in Medicare Part B must do so in order to qualify to

receive the subsidy provided in Subsections (d) and (e) of this section. The Board may require retirees to enroll in and assign to LACERS any coverage that is provided by Medicare in order to qualify to receive the subsidy provided in this section, except that retirees who are not entitled to premium free Part A of Medicare are not required to enroll in Part A.

(g) Verification of Medical Plan Coverage. Retirees who are receiving a medical plan premium subsidy payable to their medical

plan carrier pursuant to the provisions of this Article may be required from time to time to provide evidence satisfactory to the Board that their medical plan coverage or Medicare or other federal or state funded medical plan is in full force and effect.

(h) Payment Limitation. In no event shall the subsidy provided in this section, when added to any other medical plan subsidy

provided by the Department of Water and Power or the Fire and Police Pension Plan, exceed the maximum amount established in Subsection (b) or (c), as applicable.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Ord. No. 184,134, Eff. 1-22-16; Subsec. (a), Ord. No. 184,853, Eff. 4-6-17.

The medical premium reimbursement program will be provided upon the conditions set forth below in order to lessen or defray part or all of the cost of medical plans to eligible retirees, as hereinafter defined.

(a) Eligibility for Medical Premium Reimbursement. Upon written application and verification, as required by the Board, those
retirees who are receiving a service retirement benefit or disability retirement benefit from LACERS under Chapter 10, have at least
ten (10) years of Service, are age fifty-five (55) years or older, and reside more than three (3) months of the year:

(1) Outside the state of California; or

(2) In the state of California, but not within a LACERS administered HMO medical plan zip code service area, and are
enrolled in a federally qualified HMO or a state regulated health insurance plan, shall be eligible for the medical plan premium
reimbursement as provided in Subsection (c) or Subsection (e), as applicable.

(b) Maximum Medical Premium Reimbursement for Retirees Without Medicare Part A. The Board shall set the maximum
medical plan premium reimbursement for retirees not eligible for Medicare or retirees not eligible for Medicare Part A premium free
in the same manner as in Section 4.1111, Subsection (b) or Section 4.1111, Subsection (c), as applicable, of this Article.

(c) Reimbursement for Eligible Retirees Without medicare Part A. Those retirees who are receiving a service retirement
allowance or a disability retirement allowance, and who either are not eligible for Medicare or do not qualify for benefits under Part A
of Medicare premium free, shall be reimbursed the following amount:

(1) Basic Monthly Reimbursement. For one (1) to ten (10) whole years of Service Credit, forty percent (40%) of the
maximum monthly medical plan premium reimbursement amount established pursuant to the provisions of Subsection (b)
herein.

(2) Additional Monthly Reimbursement. For each additional whole year of Service Credit in excess of ten (10) years, add
four percent (4%) of the maximum monthly medical plan premium reimbursement amount to the Basic Monthly
Reimbursement.

(3) Maximum Monthly Reimbursement. The amount paid shall not exceed the maximum monthly medical plan premium reimbursement established pursuant to the provisions of Subsection (b) herein or the amount of the plan premium being reimbursed.

(4) Dependent Reimbursement. The monthly medical plan premium reimbursement shall be applied first to the retiree’s

medical plan coverage with any balance applied toward the coverage of the retiree’s dependent(s) under the same medical plan.

(d) Maximum Medical Premium Reimbursement for Retirees Enrolled in Parts A and B of Medicare. Effective January 1, 2011, the maximum monthly medical plan premium reimbursement for retirees enrolled in Parts A and B of Medicare shall be $480.41. The Board, in its discretion, may, by resolution, increase the monthly amount of medical plan premium reimbursement of retirees enrolled in Parts A and B of Medicare, provided that the amount of the maximum monthly medical plan premium reimbursement shall not exceed one hundred percent (100%) of the single-party monthly premium of the highest cost approved Medicare supplemental or coordinated plan provided by LACERS.

Effective July 1, 2011, no increases in the maximum reimbursement amount paid to retired members under this Subsection (d) shall

be provided to members who retired on or after July 1, 2011, except that former members who terminated employment prior to July 1, 2011 and retire on or after July 1, 2011, on a deferred vested basis without returning to membership shall be entitled to increases in the maximum reimbursement amount as herein provided regardless of the date of retirement. Notwithstanding all of the foregoing, increases in the reimbursement amount provided to retired members subject to Section 4.1111(c) shall be governed by the provisions of this Subsection (d) regardless of the date of the member’s retirement.

(e) Reimbursement for Eligible Retirees Enrolled in Medicare Part A and Part B. Those retirees who are receiving a service

retirement allowance or a disability retirement allowance and who qualify for benefits under Part A and Part B of Medicare, shall be reimbursed the following amount:

(1) Monthly Reimbursement (75%). For one (1) whole year of Service Credit, but less than fifteen (15) whole years of

Service Credit, seventy-five percent (75%) of the monthly medical plan premium reimbursement amount established pursuant to the provisions of Subsection (d) herein.

(2) Monthly Reimbursement (90%). For fifteen (15) whole years or more but less than twenty (20) whole years of Service

Credit, ninety percent (90%) of the monthly medical plan premium reimbursement amount established pursuant to the provisions of Subsection (d) herein.

(3) Monthly Reimbursement (100%). For twenty (20) or more whole years of Service Credit, one hundred percent (100%)

of the monthly medical plan premium reimbursement amount established pursuant to the provisions of Subsection (d) herein.

(4) Dependent Reimbursement. The Board shall establish the reimbursement policy for dependents of these eligible retirees.

(f) Payment Limitation. In no event shall the reimbursement provided in this section, when added to any other medical plan

subsidy provided by the Department of Water and Power or the Fire and Police Pension Plan, exceed the maximum amount established in Subsection (b) herein.

(g) Reimbursement for Survivors. Any person who is eligible to receive the survivor medical plan premium subsidy provided in Section 4.1115 of this Article and who lives outside the state of California or in the state of California, but not within a LACERS administered HMO medical plan zip code service area, may qualify for the medical premium reimbursement program provided in this section, except that the amount of reimbursement shall not exceed the amount that the person would have received as a medical plan premium subsidy under Section 4.1115.

(h) Medicare Enrollment. Retirees or survivors who are eligible to enroll in Medicare Part B must do so in order to qualify for the

medical premium reimbursement provided in Subsections (c), (e) and (g) of this section. Retirees or survivors who are not entitled to premium free Part A of Medicare are not required to enroll in Part A.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Ord. No. 184,134, Eff. 1-22-16.

This program is provided to reimburse the cost of the Medicare Part B basic premium to eligible retirees, as hereafter defined.

(a) Reimbursement. Reimbursement shall be limited to the Medicare Part B basic/standard premium (Medical Insurance). No

reimbursement shall be paid for Medicare Part B costs that exceed the basic/ standard premium.

(b) Eligible Retiree. In order to participate in the Medicare Part B Basic Premium Reimbursement Program, a retiree must be

eligible to receive a medical plan premium subsidy, enrolled in Medicare Parts A and B, and either enrolled in a Medicare

supplemental or coordinated plan administered by the Board or be a participant in the Medical Premium Reimbursement Program. Only retired employees may participate in this program.

(c) Verification of Eligibility for Reimbursement. Premium reimbursement shall be paid to a retiree who qualifies to participate

in this program when sufficient proof of the retiree’s Medicare Part A and Part B enrollment, coverage, and premium payment has been made as required by the Board.

(d) No Dependent Reimbursement. Premium reimbursement may not be applied toward coverage for dependents of retirees.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13.

Amended by: Ord. No. 184,134, Eff. 1-22-16; Subsec. (a) amended and Subsec. (d) added, Ord. No. 184,853, Eff. 4-6-17.

In order for a dental plan premium subsidy to be provided for a retiree, the retiree must be enrolled in a dental plan administered by the Board as part of the Dental Plan Program. The dental plan premium subsidy will be provided, upon the conditions set forth below, in order to lessen or defray part or all of the cost of such dental plan to such eligible retiree, as hereinafter defined.

(a) Maximum Dental Plan Premium Subsidy. The maximum subsidy shall be the amount provided by the Council for active

employees. The Board, in its discretion, may by resolution, increase or decrease the monthly amount of dental subsidy to reflect changes in the subsidy provided by the City for active employees, or to offset any increases or decreases in the level of benefits or the cost thereof, as the result of changes in existing benefits or the addition of newly created benefits by federal or state funded programs.

(b) Eligibility for Dental Plan Premium Subsidy. Those retirees who are receiving a service retirement allowance or a disability

retirement allowance, have at least ten (10) years of Service as members, and are age fifty-five (55) years or older, shall have paid to their approved dental plan carrier on their behalf the following amount:

(1) Basic Monthly Subsidy. For one (1) to ten (10) whole years of Service Credit, forty percent (40%) of the maximum

monthly dental plan premium subsidy amount established pursuant to the provisions of Subsection (a).

(2) Additional Monthly Subsidy. For each additional whole year of Service Credit in excess of ten (10) whole years, add

four percent (4%) of the maximum monthly dental plan premium subsidy to the Basic Monthly Subsidy.

(3) Maximum Monthly Subsidy. No retiree shall have paid to the retiree’s dental plan carrier an amount exceeding the

maximum monthly amount established pursuant to Subsection (a) or receive an amount in excess of the premium of the plan in which they are enrolled.

(4) Dependent Monthly Subsidy. There is no dental plan premium subsidy for dependents.

(c) Payment Limitation. In no event shall the subsidy provided in this section, when added to any other dental plan subsidy

provided by the Department of Water and Power or the Fire and Police Pension Plan, exceed the maximum subsidy established in Subsection (a).

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Ord. No. 184,134, Eff. 1-22-16.

The survivor medical plan premium subsidy authorized in this section shall be provided, on the terms set forth herein, to Eligible Survivors of members or retirees, as defined below, who are enrolled in medical plans administered by the Board as part of the Medical Plan Program.

(a) Eligible Survivors. The following persons shall be Eligible Survivors for purposes of this section:

(1) A person who is receiving a monthly benefit as an eligible survivor as provided in Sections 4.1011, 4.1012 or 4.1013(a)

(1) or (2) of this Code shall become eligible, as an Eligible Survivor, for the medical plan premium subsidy provided in this section either on the date of the deceased’s death, if the deceased was eligible for a medical plan premium subsidy at that time, or on the date the deceased would have become eligible for a medical plan premium subsidy had the deceased not died, based

upon the deceased’s Service.

(2) A surviving spouse or domestic partner who elects to receive the monthly benefit provided in Section 4.1010, Subsection (a)(3) of this Code shall become eligible, as an Eligible Survivor, for the medical plan premium subsidy provided in this section either on the date of the deceased’s death, if the deceased was eligible for a medical plan premium subsidy at that time,

or on the date the deceased would have become eligible for a medical plan premium subsidy had the deceased not died, based upon the deceased’s Service.

A surviving spouse or domestic partner who is receiving a monthly benefit due to a retiree’s election to provide a continuance benefit funded solely by a reduction in the retiree’s retirement allowance shall not be an Eligible Survivor for purposes of this section.

(b) Subsidy for Eligible Survivors without Medicare Part A. The survivor medical plan premium subsidy for an Eligible

Survivor who either is not eligible for Medicare or does not qualify for benefits under Part A of Medicare premium free shall be:

(1) Basic Monthly Subsidy. For one (1) to ten (10) whole years of the member’s Service Credit, forty percent (40%) of the

maximum monthly medical plan premium subsidy amount established in this subsection.

(2) Additional Monthly Subsidy. For each additional whole year of the member’s Service Credit in excess of ten (10)

whole years, add four percent (4%) of the maximum monthly medical plan premium subsidy to the Basic Monthly Subsidy.

(3) Maximum Monthly Subsidy. The maximum monthly medical plan premium subsidy shall be the single-party premium

for the lowest cost standard plan, as defined by the Board, available to participants without Medicare Parts A and B.

(c) Subsidy for Eligible Survivors Enrolled in Parts A and B of Medicare. The survivor medical plan premium subsidy for an Eligible Survivor who qualifies for benefits under Part A and Part B of Medicare shall be:

(1) Monthly Subsidy (75%). For one (1) whole year of Service Credit, but less than fifteen (15) whole years of Service Credit, seventy-five (75%) of the single-party monthly premium of the approved Medicare supplemental or coordinated plan in which the Eligible Survivor is enrolled.

(2) Monthly Subsidy (90%). For fifteen (15) whole years or more but less than twenty (20) years of the member’s Service

Credit, ninety percent (90%) of the single-party monthly premium of the approved Medicare supplemental or coordinated plan in which the Eligible Survivor is enrolled.

(3) Monthly subsidy (100%). For twenty (20) or more whole years of the member’s Service Credit, one hundred percent

(100%) of the single-party monthly premium of the approved Medicare supplemental or coordinated plan in which the Eligible Survivor is enrolled.

(d) Medicare Enrollment. Eligible Survivors who are eligible to enroll in Medicare Part B must do so in order to receive the subsidy provided in this section. An Eligible Survivor who is age sixty-five (65) or older must enroll in Medicare as required by the Board in order to receive the subsidy authorized in this Section, except that Eligible Survivors who are not entitled to premium free Part A of Medicare are not required to enroll in Part A.

(e) Limitation on Increases. Effective July 1, 2011, no increases in the amounts paid to the medical plan carriers under

Subsections (b) and (c) of this section shall be provided on behalf of survivors of members retired on or after July 1, 2011, or on behalf of survivors of members who die on or after July 1, 2011, prior to retirement, except that survivors of former members who terminated employment prior to July 1, 2011, and either died prior to retirement or retired on or after July 1, 2011, on a deferred vested basis without returning to membership shall be entitled to increases, as provided in Subsections (b) and (c) of this section, regardless of the date of retirement. Notwithstanding all of the foregoing, increases in the amounts paid on behalf of survivors of members subject to Section 4.1111, Subsection (c) shall be governed by the provisions of Subsection (b) and (c) of this section, as applicable, regardless of the date of the member’s retirement or death.

SECTION HISTORY

Added by Ord. No. 182,629, Eff. 7-25-13. Amended by: Ord. No. 184,134, Eff. 1-22-16; Subsec. (b)(3), Ord. No. 184,853, Eff. 4-6-17..