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17 <br />B. Plan Co-Pays <br />The health maintenance organization (HMO) medical plans co-pays shall be ten dollars ($10) <br />for office visits. The prescription drug co-pays shall be ten dollars ($10) for generic, fifteen <br />dollars ($15) for brand and thirty-five dollars ($35) for non-formulary (the Kaiser HMO <br />provides for a two-tier prescription drug plan). The Point of Service (POS) medical plan co- <br />pays shall be fifteen dollars ($15) for office visits. The prescription drug co-pays shall be ten <br />dollars ($10) for generic, twenty-five ($25) for brand and thirty-five dollars ($35) for non- <br />formulary. <br /> <br />C. Increases in Premiums <br />During the term of this agreement, the City will pay for any increase in the medical plan <br />premiums up to a maximum of 15% of the lowest cost HMO family rate. The difference will be <br />deducted from the employee’s paycheck on a pre-tax basis. <br />In the event that the medical premium increase is less than 15%, the City’s sole obligation is to <br />pay the lower percentage increase. <br /> <br />D. Changes to Plan Designs <br />During the term of this Agreement, the City reserves the right to propose changes to the plan <br />designs and co-pay structure in order to reduce costs to the City and employees. Changes to <br />plan design shall be by mutual agreement. <br /> <br />14.2 Hospital and Medical - Retired Employees <br /> <br />A. Federal or State Legislation <br /> Plan Design <br />The City reserves the right to meet and confer with the Association for the purposes of <br />coordinating retired employees hospital and medical care in the event Federal or State <br />legislation is implemented that effects retiree's medical insurance. <br /> <br />B. Benefits for Medicare Eligible Retirees <br /> All retirees eligible for Medicare are required to apply for benefits when eligible to remain on <br />the City’s group health plans. Upon qualifying for and receiving parts A and B of Medicare, <br />the City shall not be obligated to contribute a monthly amount in excess of the monthly <br />premium for the Kaiser supplement to Medicare Health Plan through June 30, 2009. For <br />employees who retire after July 1, 2009, the City shall not be obligated to contribute a monthly <br />amount in excess of the monthly premium for the lowest cost HMO health plan supplement to <br />Medicare as provided below. <br /> <br /> <br />C. Spousal Continuation of Benefits <br /> In the event the employee is eligible for two-party coverage and the eligible employee is <br />deceased, the amount the City is obligated to pay shall be reduced by 1/2 (one half). If the <br />spouse remarries, the obligation by the City shall terminate. <br /> <br />D. Plan Design for Employees Who Retire Prior to July 1, 2009 <br /> <br /> Hospital and Medical - Retired Employees <br /> <br /> Effective March 1, 1990, for all employees who retire for service after March 1, 1990 the City <br />shall pay for each year of service with the City of Pleasanton, four percent (4%) of the monthly <br />Page 339 of 908