Subsidies and Deductions

Subsidies

The purpose of the subsidy is to assist the Retiree with the cost of medical and dental coverage. It may or may not be sufficient to cover the premium cost of the plan and coverage level chosen. The monthly net Retirement Allowance must be sufficient to cover any necessary monthly premium deduction(s) based on the plan and coverage level chosen.

Eligibility for a subsidy is based on whole years of City service credit (a minimum of 10) and age (at least 55). A retired civilian employee is also eligible for a subsidy if retired no later than September 30, 2003 under the special provisions of age 50 and at least 30 years of service. The subsidy amount is calculated at 4% per year of City service credit. In other words, if LACERS verifies your City service credit at 10 years, you would receive 40% of the maximum subsidy; at 25 years, you would receive 100% of the maximum subsidy. The current maximum medical subsidy for Plan Year 2008 is $1,022. This subsidy is subject to change each year. Please use the link to the medical and dental subsidy calculators to determine your subsidy.

Deductions for Medical and Dental Premiums

Once your subsidy is applied to the premium for the coverage you elect, your net monthly retirement allowance must be enough to cover the remaining amount in order for you to enroll in the plan(s). For example, if the premium for the plan you select is $817.74/month and your subsidy is $408.80/month, then your net monthly allowance must cover the $408.94 balance. Premium deductions are always made one month in advance of the coverage period.

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