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Medical Plan Premium Subsidies

Council File 10-1868

Under review — the city is finalizing ordinances to implement a settlement with police and firefighter unions over how their retiree health subsidies will be calculated going forward. Council's Personnel Committee approved the approach; it now needs full council action to take effect.

Introduced
2010-12-02
Last changed
2026-06-26
Status
open
Expires
2028-06-26
Committee
Personnel and Hiring Committee
Initiated by
City Administrative Officer
References
City Attorney Report R11-0162Ordinance 181746

Brief

The City Administrative Officer initiated this ordinance in 2010 to freeze the maximum monthly medical plan premium subsidy for employees retiring on or after July 1, 2011, affecting both the Los Angeles Fire and Police Pensions System (LAFPP) and the Los Angeles City Employees Retirement System (LACERS). Council adopted the ordinance in May 2011 by a 10-0 vote with five abstentions. The matter became inactive until June 2026, when the Personnel and Hiring Committee approved the item again on June 26, 2026.

Full summary

Council File 10-1868 traces the long arc of how Los Angeles manages retiree health insurance subsidies for city employees. The original ordinance, driven by budget pressures following the 2008 recession, froze the maximum monthly medical plan premium subsidy at $1,097.41 for all employees retiring on or after July 1, 2011. The City Administrative Officer's 2010 report projected General Fund savings of approximately $112 million after the first year. The freeze applied to both LACERS, which covers mostly civilian employees, and LAFPP, which covers sworn police officers and firefighters — though Councilmember Eric Garcetti's April 2011 motion emphasized treating the two systems separately, given their distinct governance structures and benefit rules. The legislative path in 2011 moved quickly. The Personnel Committee waived consideration on April 7. Council adopted Garcetti's motion on April 20, directing the City Attorney to draft a LACERS freeze ordinance within 14 days and directing the CAO to report on LAFPP-specific impacts, including effects on the Deferred Retirement Option Plan (DROP), retirement rates, and whether Charter changes were needed. A substitute ordinance presented by Councilmember Paul Koretz on May 3 amended the Los Angeles Administrative Code to freeze the subsidy across both systems. It was held over under Charter Section 1618(b), then adopted by a 10-0-5 vote on June 3, 2011, taking effect June 20, 2011. The freeze, however, did not end the matter. In response to the 2011 ordinance, the Los Angeles Police Protective League (LAPPL) and the United Firefighters of Los Angeles City (UFLAC) negotiated a Letter of Agreement with the City creating an exception: employees who contributed an additional 2% of biweekly salary on a post-tax basis could retain access to an annually adjusted subsidy rather than the frozen rate. Disputes over how that agreement was to be interpreted led to two lawsuits filed by LAPPL and UFLAC in 2012 and 2017. Those cases were resolved through a settlement: in May 2024, the LAFPP Board adopted a new methodology — developed by an ad hoc committee that included LAPPL and UFLAC representatives — for calculating future increases to the maximum non-Medicare health subsidy. The 2026 activity implements the fallout from that settlement. The CAO's June 9, 2026 report recommended that Council direct the City Attorney to draft ordinances updating LAFPP plan terms to reflect the new subsidy calculation method, authorizing amortization of costs for the LACERS Peace Officer Transfer Program under Measure FF, and making other technical cleanup amendments to both LACERS and LAFPP plan provisions. The CAO noted that the settlement changes the calculation method but not the maximum subsidy amount, so there should be no net fiscal impact from the LAFPP portion; however, amortizing the LACERS Peace Officer Transfer Program costs will affect the General Fund. The Personnel and Hiring Committee approved the recommendation on June 26, 2026, with Councilmembers McOsker and Soto-Martinez voting yes and Rodriguez absent. The file now awaits full Council action on the City Attorney's enabling ordinances.

Activity (22)

  • 2026-06-26 Personnel and Hiring Committee approved item(s) .
  • 2026-06-22 Personnel and Hiring Committee scheduled item for committee meeting on June 26, 2026.
  • 2026-06-10 City Administrative Officer document(s) referred to Personnel and Hiring Committee.
  • 2026-06-09 Document submitted by City Administrative Officer, dated June 9, 2026.
  • 2011-06-17 Council action final.
  • 2011-06-16 Mayor transmitted file to City Clerk. Ordinance effective date: June 20, 2011.
  • 2011-06-06 City Clerk transmitted file to Mayor. Last day for Mayor to act is June 16, 2011.
  • 2011-06-03 Council adopted item forthwith.
  • 2011-05-03 Council adopted substitute ordinance. Ordinance held over to June 3, 2011, pursuant to Charter Section 1618(b).
  • 2011-04-29 City Clerk scheduled item for Council on May 3, 2011.
  • 2011-04-29 City Attorney document(s) referred to Council.
  • 2011-04-29 Document(s) submitted by City Attorney, as follows:City Attorney report R11-0162, dated April 29, 2011, relative to an ordinance amending the Los Angeles Administrative Code to freeze the maximum monthly medical plan premium subsidy at the amount currently in effect for employees retiring on or after July 1, 2011.
  • 2011-04-26 Council action final.
  • 2011-04-20 Council adopted item forthwith.
  • 2011-04-12 Council continued item to April 20, 2011 .
  • 2011-04-08 City Clerk scheduled item for Council on April 12, 2011.
  • 2011-04-08 City Administrative Officer document(s) referred to Council.
  • 2011-04-07 Document(s) submitted by City Administrative Officer, as follows:City Administrative Officer report, dated April 7, 2011, relative to the retiree medical subsidies for the Los Angeles Fire and Police Pensions System (LAFPP) and the Los Angeles City Employees Retirement System (LACERS), etc.
  • 2011-04-07 City Clerk scheduled item for Council on April 12, 2011.
  • 2011-04-07 Personnel Committee waived consideration of item .
  • 2010-12-03 City Administrative Officer document(s) referred to Budget and Finance Committee.
  • 2010-12-01 Document(s) submitted by City Administrative Officer, as follows:City Administrative Officer report, dated December 1, 2010, relative to a recommendation for an Ordinance modifying the Los Angeles Administrative Code (LAAC) to freeze the Los Angeles Fire and Police Pensions (LAFPP) maximum medical subsidy amount at the current level, etc.

Documents (17)

Council votes (1)

  • 2011-06-03 Adopted — 10-0-5 · Regular

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