FACTS ABOUT THE
RETIREMENT HEALTH INSURANCE
PREMIUM ASSISTANCE (RHIPA)
TRANSITION TO RETIREMENT HEALTH SAVINGS (RHS)

A Change Agreed Upon by the City and Unions

The transition from the current Retiree Health Insurance Premium Assistance (RHIPA) benefit to an enhanced Retirement Health Savings (RHS) benefit is the result of extensive negotiations between the City and its police and fire unions over the Joint Benefits Agreement. Throughout those negotiations, the parties spent countless hours evaluating the RHIPA Plan’s long-term financial viability, considering potential modifications that could preserve the Plan, and exploring alternative approaches to providing meaningful retiree healthcare support.

After careful consideration of the available options, the parties ultimately concluded that transitioning to an enhanced RHS benefit offered a more sustainable and reliable approach for providing healthcare assistance to employees in retirement.

The unions voted to approve the tentative agreements, which will come before City Council for ratification on September 1.

While the agreement was negotiated with the police and fire unions, it also affects the City's non-represented employees. RHIPA has historically operated as one shared plan covering both represented and non-represented employees, with contributions and plan assets combined.

Why Is RHIPA Changing?

RHIPA is a shared retirement healthcare subsidy established in 2014. Over time, the program has faced significant long-term funding challenges, despite multiple changes made by the City and unions to try to preserve it.

Maintaining the current RHIPA structure would have required significant additional City funding—estimated at $5 million to $7.5 million—along with reductions to benefits. Even with those changes, actuarial projections showed that the program still could not guarantee that current employees would receive the intended benefit when they retire.

The issue is not simply the cost of the program. The current structure was not financially sustainable over the long term. Current actuarial projected the plan to be insolvent by 2037.

RHIPA Is Not Equitable

Under RHIPA, employees do not have individual accounts. Instead, employees contributed to and received benefits from one shared fund. As a result, what an employee ultimately received was not tied to what they contributed.

For example, an employee who retired in 2014 and only contributed about $375 over their career could receive more than $80,000 in benefits, while the employee who retires in 2037 and contributes more than $14,000 could receive little or no benefit.

The enhanced RHS structure creates individual accounts, giving eligible employees greater control over their retirement healthcare resources.

What Is Changing?

The agreement does not eliminate retirement healthcare assistance. Instead, RHIPA resources will transition into an enhanced Retirement Health Savings benefit.

Eligible employees will have individual RHS accounts that can be used for eligible healthcare expenses in retirement.

The agreement also includes transition resources for eligible current employees and retirees, including lumpsum RHS contributions based on years of service, net of RHIPA benefit received, and a three-month grace period for eligible retirees.

What Happens Next?

We understand that retirees have questions and concerns about this change.

Four (4) online information sessions will be held for retirees to ask questions and provide feedback:

Monday, 08/31/2026
8:30am to 9:30am
10:30am to 11:30am  
6:00pm to 7:00pm

Tuesday, 09/01/2026

8:00am to 9:00am

The tentative agreements will be presented to the City Council for ratification on September 1. The memo attached to the meeting agenda item, is available here.