Unit 2

Retiree Medical Stipend: Unit 2 - Firefighters

Retirees in Unit 2 may be eligible to receive a monthly medical stipend upon retirement. Retirees must meet certain criteria regarding age and years of service as outlined in the Unit 2 Post Retirement Medical Benefits Defined Contribution Plan. Retirees should contact their union representative to obtain a copy of the plan document.

Eligible retirees must submit substantiation of their qualifying medical expenses in order to receive a stipend. This is true whether or not you continue your health insurance through CalPERS. Upon retirement, you will be sent information by mail on how to submit a claim for reimbursement.

Submitting Claims for Reimbursement

Claims for reimbursement must be submitted using the City's substantiation form. Substantiation forms are due on the first day of each quarter for the prior quarter, and stipends will be paid 30 days after the end of each quarter. The payment schedule is shown below:
If Claim is Submitted By:
Reimbursement Will Be Paid By:
January 1
January 31
April 1
April 30
July 1
July 31
October 1
October 31
Claims submitted after the due dates above will be paid on the next scheduled reimbursement date. All claims for benefit payment must be submitted no later than 90 days after the end of the calendar quarter in which they were incurred.

A substantiation form will be mailed to you upon retirement and with each subsequent payment.

In order to ensure that reimbursements are not included in gross income, the IRS requires each retiree to provide documentation as detailed below.

Medical & Health Insurance Premiums

Participants may claim reimbursement for insurance premiums paid for policies that cover medical care. These policies may provide payment for: health, dental, vision, and eligible long-term care premiums as defined in section 213(d) of the Internal Revenue Code. Premiums paid for these services under COBRA are also included. Payments made under a Section 125 plan are not reimbursable.

Participants need to certify that they are enrolled in a health plan, and the amount paid by the participant each month for that plan; however because medical insurance premiums are typically the same each month, participants will only be required to provide substantiation once a year for those premium payments. Participants will need to reaffirm this certification at the beginning of each calendar year, and provide a bill or statement showing the regular monthly premium paid. While the certification will be annual in these cases, payment will still be quarterly.

Participants will be asked to provide copies of current insurance premium statements indicating:
  • Insurance is in force
  • Amount of premium
  • Date premiums were paid and for how much

Out-of-Pocket Physician & Medical Expenses

Participants will be allowed to submit reimbursement claims for out-of-pocket medical expenses. You can generally include expenses you paid for yourself, your spouse, and dependents you claim for income tax purposes.

To submit a claim, a participant must provide the following:
  • A written statement, or itemized bill, from a medical provider or other independent third party stating
    • That the medical expense was incurred
    • The amount of such expense.
The participant must also certify that the medical expense has not been reimbursed or is not reimbursable under any other health plan coverage. There cannot be any reimbursement of future or projected expenses.

Out-of-Pocket Medicine & Drug Expenses

As with out-of-pocket physician and medical expenses, medicine and drug expenses may also be reimbursed. These expenses must be documented with a receipt for the purchase, and may include over the counter drugs and medicine. Examples of allowable over the counter expenses include: antacid, pain relievers, allergy medicine, and cold medicine. However, items such as vitamins, cosmetics and toiletries are not approved reimbursable expenses by the IRS.

Some examples of allowable medical expenses are:
  • Insurance premiums
  • COBRA premiums
  • Deductibles and co-payments
  • Prescription drugs
  • Vision care expenses
  • Over the counter medicines
  • Hearing aids/batteries
  • Chiropractic care
For a more complete list see IRS publication 502 "Medical and Dental Expenses".