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It is hereby declared to be the purpose of this article to authorize and provide group insurance and health plan coverage for officers, employees and retirees of the city and for their dependents, which may be provided on a self-insured basis or through the purchase of fully insured products, as determined by the city and as set forth in the city's applicable health plan documents.
(1953 Code, ch. 20, § 61; Ord. No. 2208, § 1, 9-5-61; Ord. No. 4138, § 1, 2-19-74; Ord. No. 11628, § 1, 3-5-19)
The Mayor and Council may negotiate and execute any necessary agreement with a group insurance carrier or a self-insured health plan containing such terms and conditions as may be required to provide group insurance and health plan coverage for officers, employees and retirees of the city and their dependents. All determinations regarding eligibility and coverage under all city health plan shall be made in accordance with the provisions of the applicable plan documents and agreements. The group insurance or health benefits offered by the city shall be made available to eligible individuals, as determined in accordance with the applicable plan documents, but coverage shall not be mandatory for any eligible individual (absent a change in applicable federal or state law). With regard to any health plan coverage made available to city retirees pursuant to this article, the continued availability of such services after a retiree becomes eligible for Federal Medicare will be determined in accordance with the applicable health plan documents.
(1953 Code, ch. 20, § 62; Ord. No. 2208, § 1, 9-5-61; Ord. No. 4138, § 1, 2-19-74; Ord. No. 11628, § 2, 3-5-19)
Sec. 22-81.1. There is established the City of Tucson Self-Insured Health Benefits Trust. The mayor and council shall adopt a Trust Agreement that sets forth the specific terms of the Health Benefits Trust, with a stop-loss provision shall be incorporated into the Trust Agreement.
Sec. 22-81.2. Initially, the Trust shall provide funding for medical and pharmacy benefits made available to officers, employees and retirees of the city and their dependents. In the uniform discretion of the city, tax-preferred health care funding vehicles such as health savings accounts and health reimbursement accounts may be funded through the Trust in connection with the self-insured health plan coverage. The Trust may be expanded at future dates to include the self-funding of other employee welfare benefits as directed by the mayor and council and as may be authorized by the annual appropriation of funds by the mayor and council.
Sec. 22-81.3. The Trust shall be held separate from the general assets of the city and the Self-Insured Trust Fund established pursuant to Tucson Code Chapter 18. The Trust Agreement may be amended by the mayor and council at any time in their discretion. The board shall have the power and discretion to recommend amendments to the Trust Agreement to the mayor and council, and shall be afforded a reasonable opportunity to review and comment on any proposed amendments before action is taken by the mayor and council.
Sec. 22-81.4. An annual audit of the Trust Fund shall be conducted by an external auditor designated by the board. A copy of the audit report shall be kept on file in the city's retirement and benefits office for a period of not less than five (5) years.
Sec. 22-81.5. The city manager shall designate a risk management consultant or an insurance administrator licensed pursuant to Title 20, Chapter 2, Article 3 of the Arizona Revised Statutes. Any insurance administrator or risk management consultant shall present evidence of licensure in accordance with state law to the board periodically and upon request.
Sec. 22-81.6. Any health benefits plan adopted by the city shall include terms and conditions of coverage and exclusions of coverage. Neither the implementation of the Self-Insured Health Benefits Trust, nor anything in a benefit plan document, the Trust Agreement or this Chapter 22, Article IV of the Tucson Code shall be interpreted to expand or increase the liability of the city for any health benefit claim.
(Ord. No. 11628, § 3, 3-5-19)
Sec. 22-82.1. The board of trustees shall include five (5) joint trustees, all of whom shall be at least twenty-one (21) years old, citizens of the United States of America and reside or work in the City of Tucson, Arizona. One trustee shall be an officer of the city designated by the city manager and no other trustee shall be an officer or employee of the City of Tucson. Except for the city officer appointed to the board of trustees by the city manager, the trustees shall be appointed by the mayor and council and shall have expertise in the field of finance, health or medical insurance, employment benefits, health care or actuarial science.
Sec. 22-82.2. Trustees shall serve four (4) year staggered terms. The city may, in the Trust Agreement, set forth special initial terms for the individual trustees, to ensure continuity of experience on the board. Any trustee may be reappointed by his or her appointing authority upon expiration of his or her term, provided that no trustee other than the city officer trustee serves more than two (2) consecutive terms. The city officer who is appointed as a trustee shall not be subject to term limits.
Sec. 22-82.3. No person shall qualify as trustee until he or she has been bonded. The bond requirement may be satisfied by the blanket performance bond or other coverage provided by the city.
Sec. 22-82.4. Trustees are subject to removal and substitution by their appointing authority, with or without cause. Any trustee may, upon expiration of his or her term, continue to serve until a replacement is appointed by the appointing authority. Additional rules regarding the resignation, removal and replacement of trustees, and regarding board officers and procedures, shall be set forth in the Trust Agreement.
Sec. 22-82.5. Trustees shall not be entitled to receive compensation for their services as trustees, except that trustees shall be entitled to reimbursement for any reasonable out-of-pocket cost and expenditures made by the trustees in the performance of their duties as trustees. The employment compensation paid by the city to the city officer who is appointed to serve as a trustee shall not be considered compensation for trustee services.
Sec. 22-82.6. The board of trustees shall be responsible for, and shall have the power and authority necessary to, manage the investment of all trust assets in its discretion, and to provide advice and recom mendations regarding management, funding and sufficiency of the trust.
Sec. 22-82.7. The Board of Trustees shall meet at least four (4) times per year or more frequently if determined necessary by the chairperson of the board, or as requested by the city manager.
Sec. 22-82.8. The board of trustees shall serve in an advisory capacity to the city, providing advice, recommendations and feedback to the city with regard to the design and cost of the health benefits program offered by the city on a self-insured basis, all in advance of final approval of such program by the mayor and council. The board shall not be responsible for the design of the health benefits program offered by the city to officers and employees of the city and their dependents, nor shall the board be authorized to determine the premiums, rates, cost sharing and other financial aspects of the health benefits program.
Sec. 22-82.10. The board shall act in conformance with this Chapter 22, Article IV and the terms of the Trust Agreement.
Sec. 22-82.9. The board of trustees shall be exempt from all provisions of Chapter 10A, title XIII of the Tucson Code, with the exception of Section 10A-136 of the Tucson Code.
(Ord. No. 11628, § 4, 3-5-19)
The city manager shall annually recommend to the mayor and council the level of funding necessary to achieve and maintain adequate trust funding. The determination of the appropriate amount of funding for the trust shall be made annually and shall be solely within the discretion of the mayor and council. The trust shall be funded by allocation of funds from general fund and non-general fund departments. Once funds are deposited to the trust, said funds shall not be subject to the local government budgeting provisions of A.R.S. § 42-17101 et seq. All monies received by the city for the purpose of funding the self-insured health benefits plan shall be deposited into the trust fund, including all health care premiums, contributions, credits, rebates and refunds. Incentive payments and allowances that are made available by service providers and spent by the service providers on plan or trust related matters are not received by the city and are not required to be deposited to the trust.
(Ord. No. 11628, § 5, 3-5-19)
The city's predetermined proportionate share of the premium or payment cost of the group insurance, self-insured health plan coverage provided for officers, employees, retirees and dependents and any tax-preferred health coverage funding vehicles included in the trust shall be paid from funds budgeted and authorized to be paid during each fiscal year that such group insurance policy or health plan shall be in effect. The finance director is hereby authorized and directed to pay, upon receipt of duly executed demands, to the group insurance carrier or the self-insured health benefits such sums as may, from time to time, be due and payable as premiums or payments in accordance with the agreement and master policy. Such payments shall be made from the appropriate fund of the city.
(Ord. No. 11628, § 6, 3-5-19)
The human resources director is hereby charged with the duty of causing all officers, employees and retirees of the city who are eligible to participate in an employee health or welfare plan to be informed as to their benefits, rights and obligations under such health or welfare plan. The human resources director also is directed to deduct and withhold for each and every payroll period from the compensation of each such officer, employee and retiree (or from pension payments, in the case of a retiree) a sum equal to that individual's predetermined proportionate share of the premium or cost of the group insurance, self-insured health benefits plan provided to and elected by such officer, employee or retiree and any tax-preferred health coverage funding vehicles included in the trust. In appropriate cases, as determined by the human resources director, officers, employees and retirees may submit payment of his or her predetermined proportionate share of the premium or cost of any elected group insurance or self-insured health benefits plan via alternative means acceptable to the human resources director. The amount so withheld or collected shall be paid to the appropriate insurance company or to the Self-Insured Health Benefits Trust as provided by section 22-81; however, failure of the human resources director to withhold such sums shall not relieve such officer or employee from whose compensation such sums are not withheld from liability therefor. If more or less than the correct amount is deducted in any payroll period or collected from the officer, employee or retiree, proper adjustment or refund shall be made, without interest, in such manner and for such time as the human resources director shall prescribe.
(Ord. No. 11628, § 7, 3-5-19)
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