Staff Report.Authorize The Advantage Group Agreement
PREPARED BY: Lisa Velasco
Human Resources Director
Reviewed by: Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/21/2021 ITEM NO: 14
DATE: December 15, 2021
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute an Agreement with The Advantage
Group to Continue to Administer Retiree Health Contribution
Reimbursements in an Amount Not to Exceed $57,500
RECOMMENDATION:
Authorize the Town Manager to execute an agreement with The Advantage Group (Attachment
1) to continue to administer retiree health contribution reimbursements in an amount not to
exceed $57,500.
BACKGROUND:
The Town has an existing agreement with the California Public Employees’ Retirement System
(CalPERS) to provide its health program to active Town employees and retired annuitants. The
Town provides a retiree health contribution allowance benefit to employees that were hired
before varying dates in 2018 and retire from the Town after completing five (5) years of
continuous Town service.
DISCUSSION:
After an employee retires, they are eligible to continue participation in a CalPERS health plan.
The associated cost of the health plan premium to cover the retiree and eligible dependent(s),
if any, is deducted from the retiree’s monthly retirement earnings check. Based upon prior
agreements with retirees, the Town provides a retiree health contribution allowance toward
the cost of the health plan premium. Under the terms of a prior agreement with The
Advantage Group (TAG), the Town has used TAG to reimburse retirees up to the retiree health
contribution allowance amount. The reimbursement is administered monthly from TAG
directly to Town retirees by check or direct deposit.
PAGE 2 OF 2 SUBJECT: Authorize the Town Manager to Execute an Agreement with TAG DATE: December 15, 2021
DISCUSSION (continued):
TAG also resolves issues directly with the retirees related to lost checks, questions regarding
reimbursement amounts, or misdirected funds. Currently, there are 144 retirees that receive a
monthly reimbursement amount. The prior agreement needs to be renewed and staff is
recommending that the Town continue to use the services of TAG as a third-party administrator
to reimburse retirees for the eligible amount toward the cost of CalPERS health plan premiums.
CONCLUSION:
Staff recommends that the Town Manager is authorized to execute an agreement with TAG to
continue providing monthly retiree health contribution reimbursements. TAG has provided
reliable, accurate, and customer friendly service to Town retirees. Using a third-party
administrator also provides supplemental support for Town staff resources.
FISCAL IMPACT:
The annual cost based on the number of Town retirees is $11,500. The total cost over the five
(5) years of the agreement is $57,500. The annual amount is included in the FY 2021/22
Operating Budget and will be included in future fiscal year budgets.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. The Advantage Group Administration Agreement