Flagstaff amends retiree insurance eligibility; new hires after July 1, 2024 excluded from city program

The City of Flagstaff on March 5 introduced an ordinance amending the employee handbook to clarify eligibility for the city’s retiree insurance program. Jennifer Caputo, interim deputy HR director, said the change would limit access to the city’s retiree insurance administered through the Northern Arizona Public Employees Benefits Trust (NAPEP) to employees hired on or before July 1, 2024. Employees hired after that date would not be eligible to remain on the city’s retiree plan but would be eligible for retiree coverage available through the Arizona State Retirement System (ASRS). Caputo described the rationale as a regional trust decision: NAPEP has evaluated whether to continue the city’s retiree program after ASRS developed a more comparable network of providers for northern Arizona. Staff surveyed current employees, recent hires and retirees and reported that retiree benefits were not a primary factor for recent hires’ employment decisions. Caputo said ASRS offers plans that include continued eligibility after Medicare enrollment and subsidies for retirees and provides ancillary benefits such as virtual visits and tobacco cessation programs. She said current employees and existing retirees will retain their existing eligibility under the city plan; the proposed change affects only hires on or after July 1, 2024. Council discussion focused on ensuring the council and staff correctly understood the scope: the amendment affects retiree insurance provisions only and does not change retirement benefits. The council read the ordinance by title for the first time and advanced it for later consideration. What to watch for: The change will be folded into the employee handbook and will require coordination with ASRS enrollment processes for affected future retirees; staff said agencies in the NAPEP trust coordinated communications and surveys prior to the recommendation.