The BMA has been receiving many questions about BERMT lately. Perhaps many people are getting ready to retire?
If you are wondering what is BERMT and why you pay $50 to it every paycheck, read on! And to answer the most asked question: NO you will not lose your BERMT benefits if you leave the City.
The Burbank Employees Retiree Medical Trust (BERMT) is a medical expense reimbursement plan to be used after you retire. BERMT was established in 2003 by a coalition of various bargaining units at the City of Burbank, which BMA was part of. BERMT is managed by a Board of Trustees which is made up of representatives from the participating bargaining units.
You contribute $50 to BERMT from your paycheck as a pre-tax deduction. The City matches your $50 as well. Depending on how much you contribute and the “General Benefit Amount” set by the Trustees determines what you can get back each month for medical expenses after you retire, called the “Personal Benefit Level”.
Starting 8/1/2013 for each $5 you contribute out of your paycheck, you earn 1 Contribution Credit (CC), so every paycheck you earn 10 CC. There are 26 paychecks in a year, so that is 260 CC a year. If you were contributing before 8/1/2013, then you earned 20 CC for each paycheck as long as you made a full contribution per the BMA MOU.
Here is the basic breakdown of the Personal Benefit Level you can receive each month based on the current General Benefit Amount (currently set at $300):
Tier A – 1,300 to 2,599 CC – 50% benefit ($150/month)
Tier B – 2,600 to 5,199 CC – 100% benefit ($300/month)
Tier C – 5,200 to 7,799 CC – 133% benefit ($400/month)
Tier D – 7,800 to 10,399 CC – 170% benefit ($510/month)
Tier E – 10,400 or more CC – 210% benefit ($630/month)
Do note that these benefit amounts can change over time based on how the trust funds are doing and/or actions by the Board of Trustees, like changing the General Benefit Amount. Also note that if you have less than 5 years of contributions and have separated from the City, an account will be created for you and the contributions that you made will be placed in it and will earn interest based on the current money market rate. You can then use those funds to pay for medical expenses.
When are you eligible to use your BERMT benefits?
- You have been an employee of the City of Burbank for 5 or more years and have been contributing to BERMT all those years
- You have applied for and obtained your official retirement date from CalPERS and you have started receiving pension benefits from CalPERS
- You attain age 58 and have retired per #2 above within 120 days from separating employment with the City of Burbank. If you retire more than 120 days after separating from Burbank, then you must attain age 65
What qualifies as medical expenses? Here are some examples:
- Medical premiums or contributions to health, dental, or vision insurance
- Medical expenses excludable from gross income (per IRS rules), costs for the diagnosis, cure, mitigation, treatment, or prevention of disease or injury, including insulin
- The tax deductible portion of premium payments for qualified long-term care insurance
How do you claim BERMT benefits?
To receive your monthly benefit, you must present proof of payment of your medical expenses, on a form approved by the Trustees, to the Trust. Prior to issuing payment, the Trust Office will review your receipts and determine whether to grant or deny payment. If the Trust Office denies payment in whole or in part, you may appeal.
What happens if I die before or after receiving benefits?
Should you die, your surviving spouse or domestic partner shall be entitled to 100% of your Personal Benefit Level after you would have attained the eligibility age of 58 or 65. If there is no surviving spouse or domestic partner, surviving legally dependent children shall be entitled to receive 50% of your Personal Benefit Level upon your death (to be divided equally among all children).
If I leave the City, can I continue contributing to BERMT?
Yes, you have the right to self-pay under COBRA rules. If you terminate your employment for any reason other than gross misconduct or your hours of employment are reduced, you can self-pay for a maximum period of 18 months. If you have a disability, then it is up to 29 months. Your beneficiaries can also contribute too should you die and can contribute up to 36 months.
BERMT has a website you can visit at http://bermt.com/ . There you can look at notices, get a copy of the plan policy, and download and submit forms.
If you are curious how many Contribution Credits you currently have, you can contact BERMT and request for them to send you a letter stating your current Contribution Credits.
If you want to dig a little deeper to know more about the benefits and rules, check out this Summary Plan Description: http://bermt.com/images/2019SummaryPlanDescription.pdf (updated August 2019).
I hope this information was helpful in understanding BERMT and the benefits.
The BMA Board