ITEM:		CONSENT CALENDAR
2.	CONSIDER ADOPTION OF RESOLUTION 2015-19 AUTHORIZING EXECUTION OF THE APPLICATION-AGREEMENT FOR MEDICARE-ONLY COVERAGE FOR NON-COVERED EMPLOYEES OF THE MONTEREY PENINSULA WATER MANAGEMEMENT DISTRICT
Meeting Date:			October 19, 2015	Budgeted:	Not in FY 2014-2015 Budget
From:			David J. Stoldt,	Program/	N/A
			General Manager	Line Item No.:
Prepared By:			Cynthia Schmidlin	Cost Estimate:	$6,000
General Counsel Approval: N/A
Committee Recommendation: N\A
CEQA Compliance: N/A

SUMMARY: At their May 18, 2015, the Board approved Resolution 2015-06, which initiated the “218 Agreement” process to provide Medicare-only coverage for District employees hired before April 1, 1986. The Board determined that the coverage would be effective retroactively to December 1, 2014. After a required notice period, the retirement group of four District employees without Medicare coverage voted, individually, on whether to join Medicare. Three employees decided they wished Medicare coverage and one declined.

The next step in the process is Board approval of a resolution that authorizes execution of the 218 Application-Agreement. If the resolution is approved, the General Manager would sign the Agreement. The CalPERS State Social Security Administrator would then receive the signed agreement, sign off himself, and forward it to the Social Security Administrator in San Francisco. Processing by this office can take several months, after which the District, and the new participants, would be notified regarding the commencement of Medicare payments.

RECOMMENDATION: That the Board approve Resolution 2015-19, Exhibit 2-A, authorizing execution of the Application-Agreement for Medicare-only coverage for non-covered employees.

IMPACTS TO STAFF/RESOURCES: The cost to the District from the retroactive start date of December 1, 2014 through a 218 Agreement date of June 30, 2016, would be approximately $5,223. Subsequently, both the District and employees covered by Medicare pay 1.45% of salary for the coverage.

BACKGROUND: In 1978, when the Monterey Peninsula Water Management District was formed, all State and local government agencies had the ability to choose whether to provide Social Security and Medicare coverage for their employees. The District chose not to participate in either. After April 1, 1986, all new State and local government employees became subject to mandatory Medicare Hospital Insurance. However, those who had been in continuous employment with the same agency since March 31, 1986 were exempt from mandatory Medicare. Four current District employees were in this group. At the time of the new law, these employees declined Medicare coverage. In May, 2015, the Board responded to a request from these employees to begin the process allowing them to join the Medicare program.

EXHIBIT

2-A Resolution 2015-19 – Regarding Execution of the Application-Agreement for Medicare-Only Coverage, and Attachments

U:\staff\Boardpacket\2015\20151019\ConsentClndr\02\Item2.docx