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b. The $500 stipend shall be used exclusively to pay health insurance <br /> premiums. The stipend may be reduced if the retired employee's <br /> monetary contribution to a health insurance plan is less than the stipend. <br /> c. Retirees will have the option to select whether or not payments made <br /> under the Retirement Health Stipend Plan are subject to federal taxes. <br /> d. Payments may be classified as a "Nontaxable Fringe Benefit" under the <br /> following conditions: Retiree must provide proof of prior payment of <br /> premiums (i.e. receipts — for Medicare Part B or any other type of <br /> covered health insurance premiums). Retiree will be reimbursed by the <br /> City not to exceed the amount paid directly by the retiree. No tax <br /> document (i.e 1099 or W-2) shall be issued or required. <br /> e. Payments may be classified as a "Taxable Fringe Benefit" under the <br /> following conditions: Retiree is not required to provide, or is unable to <br /> provide proof of payment of premiums. Retiree will be paid the amount <br /> due under the Stipend Plan through a payroll check with appropriate <br /> income tax and FICA deductions. A W-2 will be issued annually to the <br /> retiree. Florida Retirement System ("FRS") will be unaffected, as <br /> payments to retirees are not"wages" and will not be reported to the FRS <br /> as such. <br /> f. The City has the absolute right to terminate payments under the <br /> Retirement Health Stipend Plan if the retired employee has either <br /> falsified information or not disclosed any other provisions of health <br /> insurance or failed to meet the eligibility requirements in any way set <br /> forth in this policy. <br /> 503:2 Retirement Benefits for Command Staff Page 6 of 6 <br /> 150 <br />