Council passes motion supporting equal partner benefits
CINCINNATI, OH (FOX19) -
Cincinnati city council members voted to pass a motion that would extend equal partner benefits to current city employees. All council members voted in favor of the motion with the exception of Charlie Winburn who abstained stating that he needed further legal clarification before he could get behind the motion.
"It feels great," shared council member Chris Seelbach who lead the effort behind the program. "I'm very happy and proud of my colleagues that they were willing to stand with me on this."
The motion includes medical, dental and vision coverage, voluntary term life insurance coverage, and participation in the Health Lifestyles Program which includes the Health Reimbursement account.
Council members are asking the city's Law Department to draft an ordinance that will allow certain pension benefits to become available to equal partners of Cincinnati Retirement System employees. Those benefits include retirement death benefits and survivor Benefits for "Death in Service"
The motion came after the City Administration presented a report highlighting the estimated costs and possible legal issues associated with additional dependent benefits.
The city plans to model their equal benefits program after the City of Columbus' criteria for equal benefits eligibility.
In the report, the Administration estimates the additional cost of providing medical, dental & vision coverage benefits based on different scenarios of the number and type of enrollees projected to take part.
The report states that children of eligible equal partners may also be eligible for certain benefits.
The projections range from $465,000 dollars per year to $543,000 dollars per year. The lowest number assumes 46 individual equal partners and twelve equal partners with children and the highest cost assumes 73 equal partners and four partners that have children.
"In the end we're doing this because it's the right thing to do," Seelbach said. "Because all people, regardless of the color of their skin, or how much money they make, or who they love, deserve to be treated fair under the law."
According to the report, an eligible "equal partner dependent" must be an adult that lives with the covered city employee and meets five key criteria:
1. The partner cannot be married or legally separated.
2. They must "share responsibility with the employee for each others' common welfare"
3. The partner must be at least eighteen-years-old and "mentally competent to consent to contract"
4. An eligible partner must have been in an exclusive relationship with the employee for at least six months. They must also intend to stay in the relationship indefinitely.
5. Finally, the partner must show financial interdependence with the city employee.
"I would expect it will be very few people in the first year but I want as many people who are qualified to take advantage of this to take advantage of it," Seelbach said.
In order to demonstrate financial interdependence, the partner is required to sign a declaration of financial interdependence and provide at least four different types of support documentation. The list of acceptable documents includes proof of joint ownership of real estate or an automobile, a joint bank or credit account, a will that appoints the adult dependent as a primary beneficiary, or a retirement plan or life insurance policy beneficiary.
"If it's found that one of [the documents] did not exist you can be charged with a felony," Seelbach explained. "So any insinuation that roommates or anything like that would try to do this … we have so many things in place to prevent that it's just incredibly unlikely."
Because the City is self-insured, it annually pays the actual cost of all eligible claims submitted each year without any caps on the amount of eligible claims.
The report acknowledges that if an eligible dependent has a serious medical illness, the estimated costs would be "significantly understated".
Because equal partners are not eligible for "tax favored treatment" under federal regulations for certain medical benefits, the employee would have to pay taxes on the full market value of the medical coverage.
The City says it is unable to provide flexible spending accounts since equal partners and their children are not recognized as dependents by the IRS.
The city's "Healthy lifestyles health reimbursement Account" can be offered to equal partners and their children with an additional tax burden for those defendants. The program allows employees to earn up to $500 dollars every year if they take part in the city's healthy Lifestyles program. The report states that reimbursements to the equal partner would be taxable to the employee. The cost associated with offering the healthy Lifestyles and health Reimbursement Account is estimated at between $29,000 and $38,500 dollars per year.
Voluntary term life insurance could also be offered to eligible employees' equal partners at no additional cost to the city.
Following an analysis of benefits for retirees, the city's Retirement Board informed council members that offering retired medical benefits through a 401(h) account to equal partners could jeopardize the program's qualification status under the IRS. The Board therefore did not recommend extending medical, dental and vision benefits for Cincinnati Retirement System employee's equal partners and their children due to "legal uncertainties" involving the IRS.
"The majority of the Board agreed that the challenging financial status of the retirement system, and the major changes that were approved in 2011 to the benefits for retirees and actively employed members, do not justify extending medical coverage to an additional group of potential dependents at this time."
The majority of the City's Retirement Board also did not recommend extending "Survivor Pension and Medical benefits".
If non-recommended benefits were to be extended to equal partners in the future, the Retirement Department says they would request a ruling from the IRS to ensure the retirement plan remains IRS qualified. They say a ruling from the IRS could take more than year.
The Board says pension and certain death benefits could be offered at no additional cost with only minor Municipal Code changes required. A recommendation to begin steps to make those changes was included in the motion passed during Monday's meeting.
Any information identifying employees enrolled the proposed equal partner benefits program would remain private.
If council votes on the program by August 1, the Administration says employees could register during the next open enrollment period in the fall. The program could then be implemented in 2013.
Council is expected to take a final vote during Wednesday's meeting.