A PEHP account provides funds for reimbursements of eligible medical expenses at the separation of employment. Funds contributed to the account are not taxable to the employee and are invested within the account. Investment earnings are also not taxable to the employee. Upon separation of employment, funds taken out of the account for eligible medical expenses are also not taxable.

City of Scottsdale has a PEHP account with Nationwide Retirement Solutions along with the Deferred Compensation 457(b) retirement savings plan. Prior to Feb. 16, 2024, the only funds contributed to the PEHP were on behalf of employees who retire from their respective pension system and had at least 300 hours (420 hours - (56) Fire) of sick leave hours accrued upon retirement. Employees meeting the eligibility criteria receive 50% of their sick leave hours balance in to the PEHP account for reimbursement of medical expenses after separation of employment for retirement. Employees with prior medical leave balances receive 100% of their base pay at separation for retirement. For specific details on prior and current medical leave payments at retirement see Scottsdale Revised Code, Chapter 14, Article V, Section 14-83.

The PEHP account allows contributions to be made on a tax-free basis. These funds can grow through investment earnings also on a tax-free basis. Finally, when funds are taken out of the account for eligible expenses, they are not considered income, so the funds come out of the account also on a tax-free basis.

City of Scottsdale is pleased to begin employer contributions to the PEHP account while employees are actively employed. Each pay period, eligible employees will receive a contribution to their PEHP account. For fiscal year 2023-24, the contribution amount is $10 per pay period, or $260 for the fiscal year.

Employees who are in a benefits eligible position will receive the employer contribution to the PEHP account.

For employees who are in a variable hour position and become eligible for certain benefits (medical, dental and vision), employer contributions to the PEHP account will not be a part of benefits offered.

For part-time employees who are grandfathered as benefits eligible, employer contributions to the PEHP will be a part of their benefits package.

For re-hired City of Scottsdale retirees in a benefits eligible position, employer contributions to the PEHP account will be a part of their benefits package, however, distributions from the PEHP account will stop since the retiree is back employed with City of Scottsdale.

Employees eligible for contributions to the PEHP account will have the same investment options as the Deferred Compensation 457(b) Plan. The PEHP account has the same investment and administrative costs as well.