Proposition B - City Charter Amendments and Retiree Benefits and Special Situations

Proposition B, passed in 2008, changed retiree health care rules for City employees. To be eligible for retiree health benefits, employees hired after January 9, 2009 must have at least five years of credited service with a City employer: City and County of San Francisco, San Francisco Unified School District, San Francisco City College, or San Francisco Superior Court. Other government service is not credited. Also under this Charter amendment, employees hired after January 9, 2009 must retire within 180 days of separation from employment to be eligible for retiree health benefits. That means an employee must have the credited service and the age required for retirement at the time of separation from service to be eligible for retiree health benefits. A surviving dependent may be eligible for retiree health benefits if a deceased employee accrued 10 or more years of credited service with City employers. If eligible, different premium contribution rates apply for employees hired after January 9, 2009, based on years of credited service with the City employers:  

• With at least 5 years, but less than 10 years of credited service, the retiree member must pay the full premium rate and does not receive any employer premium contribution. 
• With at least 10 years but less, than 15 years of credited service, the retiree will receive 50% of the employer premium contribution for themselves.
• With at least 15 years, but less than 20 years of credited service, the retiree will receive 75% of the employer premium contribution for themselves.
• With 20 or more years of credited service or disability retirement, the retiree will receive 100% of the employer premium contribution for themselves.

Employees who separated service from a City employer before June 30, 2001 and retire after January 6, 2012 receive the employer health premium subsidies in effect at the time of their separation. View retiree premium contribution amounts based on Proposition C. If enrolled in retiree health benefits administered by the San Francisco Health Service System: 

• The retiree member receives 100% of the employer premium contribution defined by the City Charter.
• The retiree pays the full premium for any other enrolled dependents. There is no employer premium contribution.

Make an informed decision. First, confirm your years of credited service with a City employer with your retirement system (SFERS, CalPERS, CalSTRS, or PARS). Remember–if you were hired after January 9, 2009, other government service is not credited for retiree health benefits eligibility. Then, contact SFHSS. A benefits analyst will review your service credits, health benefits eligibility, retiree health plan options, and premium contributions. You can also find a general benefits overview for City and County of San Francisco Employees on the Department of Human Resources website.

If you are Medicare-eligible due to age or disability, you must contact the Social Security Administration to apply for Medicare before you retire. Plan ahead. Remember, it can take Social Security up to three months to complete processing of your Medicare enrollment so plan accordingly and start the process early.

Years of service at CalPERS and certain other California public retirement systems that provide reciprocal retirement benefits, as determined by SFERS, are NOT included in the calculation of credited service years for retiree health care vesting calculations.

Employees must retire within 180 days of separating from City employment to maintain eligibility for retiree health coverage.

Involuntary Leave

An employee placed on leave due to being on a holdover list on or before January 9, 2009, and later re-employed with the City on or after January 10, 2009, is treated as having no break in service because the leave was part of their holdover status. In this case, the employee is not required to pay contributions and remains under the original vesting schedule.

Involuntary Layoff

If an employee is involuntarily laid off and chooses to cash out their vacation and withdraw their retirement contributions, the employee is considered to have separated from the City. In this case, the employee must pay a 2 percent contribution and is placed under the new vesting schedule, unless the employee had at least five years of service credit and was already vested before being placed on the holdover roster.

As long as an employee maintains continuous employment, adding or removing positions, such as holding both a PCS and TEX appointment, does not require the employee to pay the 2 percent contribution.

If an employee separates on or after January 10, 2009 with fewer than five years of service and later returns, the employee may purchase prior service time and count it toward reaching the five years needed to vest under the original rules.

If an employee withdraws their service credit balance upon separation, they lose access to retiree healthcare under the original rules, even if they had previously vested.