Healthcare Benefits Updates
Changes to Retirement Healthcare Premium Payments Coming Jan. 1, 2025
Beginning January 1, 2025, Marin Water is implementing changes to the way that retiree healthcare premiums are paid each month. This will NOT change the amount of your benefit.
The full amount of the District’s contribution toward retirees’ monthly healthcare premiums will no longer be paid directly by the District to CalPERS. Instead, CalPERS will deduct a portion of the premium amount from a retiree’s monthly CalPERS pension and the District will provide a direct reimbursement to the retiree for that amount.
How will retirees receive the payment for reimbursement of their premiums?
To implement this change, Marin Water has entered into a health reimbursement arrangement (HRA) that will be administered by a third-party vendor – the P&A Group.
Under this arrangement, P&A Group will be responsible for administering the monthly reimbursement payments described above through a separate payment at the beginning of each month. The first HRA healthcare reimbursement payment will sent to retirees by mailed check in early January.
After retirees receive their first reimbursement check, they will have the opportunity to enroll in direct deposit, if they choose. With direct deposit, the reimbursement will be automatically deposited into the retiree’s designated checking or savings account within 1-2 business days at the start of each month.
If a retiree chooses not to enroll in direct deposit they will continue to receive the monthly reimbursement by check; check processing takes approximately 3-5 business days to process. The checks will be mailed via U.S. postal mail after processing. To avoid processing and postal mail delays, Marin Water highly recommends that retirees enroll in automatic payment.
How can retirees enroll to receive premium reimbursement payments by direct deposit?
Retirees will receive instructions for creating an account and enrolling in direct deposit with P&A Group by early January 2025 and may enroll in this payment option any time thereafter.
Why is the District implementing this new process?
The District negotiated a new labor contract with its employee union in 2023. The new contract establishes a graduated vesting schedule to determine the District’s contribution to retiree healthcare benefits for employees hired after January 1, 2024. With this change, CalPERS is no longer able to administer retiree health care reimbursements from the District. To ensure that reimbursements are properly administered, the District is partnering with the P&A Group to distribute healthcare reimbursement payments on a monthly basis.
When will I receive the reimbursement check?
The first check will be mailed before January 1, 2025. Retirees will have the option to enroll in direct deposit with the P&A Group after the first check is received. After direct deposit is set up, reimbursements are scheduled to be deposited on or before the 1st of each month.
What is the tax impact of this change? Will the P&A reimbursement be taxed?
The District does not anticipate any tax implications caused by this reimbursement payment. The reimbursements from P&A Group are not subject to income tax and the P&A Group will not be sending an end of year tax statement. Individuals with questions regarding tax implications should contact their income tax professional.
Who can retirees contact if they have any questions?
Please contact Marin Water Human Resources staff by phone at 415.945.1434 or by email at HumanResources@MarinWater.org.
Example Scenarios
Retiree Only, PERS Medicare Coverage
This retiree has PERS Medicare healthcare coverage, which is a $488 premium. Her CalPERS pension is $1,500.
Currently, Marin Water pays CalPERS $488, which covers her PERS Medicare healthcare premium in full, making the retiree’s net pension from CalPERS $1,500.
Under the new process, Marin Water will pay $158 to CalPERS for the healthcare premium (minimum required by law). The remaining premium amount of $290 will be deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $1,210.
Marin Water will reimburse the retiree $290 (via P&A Group) to bring her total net income back to $1,500.
Current Process
Process as of January 2025
| Current Process | Process as of January 2025 | |
|---|---|---|
| Retiree Healthcare Premium Amount | $488 | $488 |
| CalPERS Pension | $1,500 | $1,500 |
| Deduction for Retiree Portion of Healthcare | $- | $290 |
| Net Pension Amount | $1,500 | $1,210 |
| Marin Water Healthcare Payment to CalPERS | $488 | $158 |
| Marin Water Healthcare Reimbursement to Retiree | $- | $290 |
| Net Income to Retiree | $1,500 | $1,500 |
Retiree Only, Kaiser Sr. Advantage
This retiree has Kaiser Sr. Advantage healthcare coverage, which is a $325 premium. Her CalPERS pension is $1,500.
Currently, Marin Water pays CalPERS $325, which covers her Kaiser Sr. Advantage healthcare premium in full, making the retiree’s net pension from CalPERS $1,500.
Under the new process, Marin Water will pay $158 to CalPERS for the healthcare premium (minimum required by law). The remaining premium amount of $167 will be deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $1,333.
Marin Water will reimburse the retiree $167 (via P&A Group) to bring her total net income back to $1,500.
Current Process
Process as of January 2025
| Current Process | Process as of January 2025 | |
|---|---|---|
| Retiree Healthcare Premium Amount | $325 | $325 |
| CalPERS Pension | $1,500 | $1,500 |
| Deduction for Retiree Portion of Healthcare | $- | $167 |
| Net Pension Amount | $1,500 | $1,333 |
| Marin Water Healthcare Payment to CalPERS | $235 | $158 |
| Marin Water Healthcare Reimbursement to Retiree | $- | $167 |
| Net Income to Retiree | $1,500 | $1,500 |
Retiree Only, PERS Platinum
This retiree has PERS Platinum healthcare coverage, which is a $1,146 premium. Her CalPERS pension is $1,500.
Currently, Marin Water pays CalPERS $1,076 to contribute to her PERS Platinum healthcare premium. The remaining premium amount of $70 is deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $1,430.
Under the new process, Marin Water will pay $158 to CalPERS for the healthcare premium (minimum required by law). The remaining premium amount of $988 will be deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $512.
Marin Water will reimburse the retiree $918 (via P&A Group) to bring her total net income back to $1,430.
Current Process
Process as of January 2025
| Current Process | Process as of January 2025 | |
|---|---|---|
| Retiree Healthcare Premium Amount | $1,146 | $1,146 |
| CalPERS Pension | $1,500 | $1,500 |
| Deduction for Retiree Portion of Healthcare | $70 | $988 |
| Net Pension Amount | $1,430 | $512 |
| Marin Water Healthcare Payment to CalPERS | $1,076 | $158 |
| Marin Water Healthcare Reimbursement to Retiree | $- | $918 |
| Net Income to Retiree | $1,430 | $1,430 |
Retiree + One, Kaiser
This retiree has Kaiser healthcare coverage for herself and her family, which is a $2,655 premium. Her CalPERS pension is $3,000.
Currently, Marin Water pays CalPERS $2,152 to contribute to her Kaiser healthcare premium. The remaining premium amount of $503 is deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $2,497.
Under the new process, Marin Water will pay $158 to CalPERS for the healthcare premium (minimum required by law). The remaining premium amount of $2,497 will be deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $503.
Marin Water will reimburse the retiree $1,994 (via P&A Group) to bring her total net income back to $2,497.
Current Process
Process as of January 2025
| Current Process | Process as of January 2025 | |
|---|---|---|
| Retiree Healthcare Premium Amount | $2,655 | $2,655 |
| CalPERS Pension | $3,000 | $3,000 |
| Deduction for Retiree Portion of Healthcare | $503 | $2,497 |
| Net Pension Amount | $2,497 | $503 |
| Marin Water Healthcare Payment to CalPERS | $2,152 | $158 |
| Marin Water Healthcare Reimbursement to Retiree | $- | $1,994 |
| Net Income to Retiree | $2,497 | $2,497 |
Retiree + One, Kaiser
This retiree has Kaiser healthcare coverage for herself and her family, which is a $2,655 premium. Her CalPERS pension is $2,000.
Currently, Marin Water pays CalPERS $2,152 to contribute to her Kaiser healthcare premium. The remaining premium amount of $503 is deducted from the CalPERS pension payment, making the retiree’s net pension from CalPERS $1,147.
Under the new process, Marin Water will pay $158 to CalPERS for the healthcare premium (minimum required by law). The remaining premium amount of $2,497 will be deducted from the CalPERS pension payment, which means that the monthly premium exceeds the pension by $497 and the retiree must enroll in the CalPERS Complementary Annuitant Premium Program.
Marin Water will reimburse the retiree $1,994 (via P&A Group) to bring her total net income back to $1,497.
Current Process
Process as of January 2025
| Current Process | Process as of January 2025 | |
|---|---|---|
| Retiree Healthcare Premium Amount | $2,655 | $2,655 |
| CalPERS Pension | $2,000 | $2,000 |
| Deduction for Retiree Portion of Healthcare | $503 | $2,497 |
| Net Pension Amount | $1,497 | ($497)* |
| Marin Water Healthcare Payment to CalPERS | $2,152 | $158 |
| Marin Water Healthcare Reimbursement to Retiree | $- | $1,994 |
| Net Income to Retiree | $1,497 | $1,497 |
*If your monthly premium exceeds your monthly pension, you must contact CalPERS to enroll in the Complementary Annuitant Premium Program.