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Other Post -Employment Benefit Programs of the City of Corona <br />Actuarial Valuation as of July 1, 2015 <br />Table 6 <br />Potential Excise Tax <br />The Affordable Care Act (ACA) includes provision for a non-deductible 40% excise tax on <br />"high cost plans" beginning in calendar year 2020. This excise tax applies when the total of <br />certain includible premiums and other contributions toward the cost of coverage in employer <br />sponsored plans per employee or retiree exceeds a specified threshold amount. <br />The threshold varies by age and level of health <br />coverage. The law also makes provision for, but has <br />not yet determined different threshold levels for high <br />risk employment. Police and fire members might fit <br />into such a high-risk category, however, they might <br />not be considered high risk after retirement. <br />2018 Thresholds : <br />Ages <br />0-04,, <br />All other <br />Ages <br />Single <br />$ 11,850 <br />$ 10,200 <br />Other than Single <br />$ 30,950 <br />$ 27,500 <br />In preparing this valuation, we projected future retiree premiums expected to be subject to <br />this 40% excise tax and projected the applicable threshold amounts. We assumed increases <br />in both premiums and thresholds, as described in Table 4 (Assumptions). <br />The present value of the projected excise tax relating to retirees is shown below. The impact <br />is small and flows to the ARC calculation, illustrated here for the fiscal year ending June 30, <br />2016, <br />Excise Tax Projections relating to Retiree Healthcare <br />% of Total <br />Actuarial Present Value of Projected Excise Tax <br />$ 650,012 <br />0.5% <br />Actuarial Accrued Liability for Projected Excise Tax <br />402,485 <br />0.3% <br />Normal Cost relating to Projected Excise Tax <br />22,531 <br />1.8% <br />Impact on the Annual Required Contribution: <br />FYE 2016 <br />% of Total <br />Normal Cost change <br />22,531 <br />1.8% <br />Amortization Payment Change* <br />27,139 <br />0.4% <br />Interest Adjustment to fiscal year end <br />3,616 <br />0.6% <br />Total Addition to ARC to reflect Excise Tax <br />53,286 <br />0.6% <br />*Based on amortization of this additional AAL over 22 years on a level percent of pay. <br />These excise taxes for future retiree healthcare costs are projected to have only a minimal <br />impact on the City. This chart shows the expected tax amounts attributable to retiree <br />coverage through 2025. <br />B 0 <br />ickmore 61, j <br />Projected <br />Projected <br />Fiscal Year <br />Excise Taxes <br />Fiscal Year <br />Excise Taxes <br />Ending <br />for Retiree <br />Ending <br />for Retiree <br />June 30 <br />Coverage <br />June 30 <br />Coverage <br />2016 <br />Not Applicable <br />2021 <br />$ 1,184 <br />2017 <br />Not Applicable <br />2022 <br />1,942 <br />2018 <br />$ <br />2023 <br />2,526 <br />2019 <br />251 <br />2024 <br />1,849 <br />2020 <br />730 <br />1 2025 <br />3,483 <br />B 0 <br />ickmore 61, j <br />