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be deducted from the employee's paycheck on a pre-tax basis. This amount will be in addition to the employee contributions outlined in section 16.1 A. In the event that the medical premium increase is less than 15%, the City's sole obligation is to pay the lower percentage increase. C. Plan Co -Pays The health maintenance organization (HMO) medical plans co -pays shall be ten dollars ($10) for office visits. The prescription drug co -pays shall be ten dollars ($10) for generic, fifteen dollars ($15) for brand and thirty-five dollars ($35) for non -formulary (the Kaiser HMO provides for a two-tier prescription drug plan). The Preferred Provider Organization (PPO) medical plan co -pays shall be fifteen dollars ($15) for office visits. The prescription drug co -pays shall be ten dollars ($10) for generic, twenty-five ($25) for brand and thirty- five dollars ($35) for non -formulary. D. Changes to Plan Designs During the term of this agreement, the City reserves the right to propose changes to the plan designs and co -pay structure in order to reduce costs to the City and employees. Changes to plan design shall be by mutual agreement. The City agrees to provide up to three (3) health plan options for employees and eligible dependents. At least two (2) options will be HMOs and the other option will be a PPO. For the term of this agreement, the City agrees to continue to offer Kaiser as one of the HMO options. 16.2 Health and Medical Care — Retired Employees A. Spousal Continuation of Benefits In the case where the employee eligible for two-party coverage is deceased, the amount the City is obligated to pay shall be reduced by one half (1/2). If the spouse remarries, the obligation by the City shall terminate. Domestic partners shall be treated in the same manner as spouses for continuation of benefits. B. Plan Design Employees who retire on or after July 1, 2009, will have the same benefit co -pay and plan design as provided to active employees in accordance with Section 16.1.0 and are subject to the 15% premium cap provisions of Section 16.1.13. C. Vesting Schedule for Employees Hired Before July 1, 2012 1. Service Retirement 24