The Athens-Clarke County government has agreed to pay $3 million to settle a federal class action claiming the municipality shortchanged retirees who were promised “no cost” health care benefits as part of their pay package.

The motion for settlement filed late Thursday in the U.S. District Court for the Middle District of Georgia provides for retrospective settlement checks to be mailed to about 500 retirees and their survivors and bumps the monthly sums they and future retirees in the class will receive to pay for health insurance going forward.