HomeMy WebLinkAbout09-06-2005 ITEM VIII-B-10AUBURN
WASHINGTON
AGENDA BILL APPROVAL FORM
Agenda Subject:
Date:
Resolution No, 3907
August 31, 2005
Department:
Attachments:
Budget Impact:
Human Resources
Resolution No. 3907
Administrative Recommendation:
City Council adopt Resolution No. 3907.
Background Summary:
Resolution No. 3907 authorizes the Mayor and City
Council to approve and ratify the first amendment to
the City of Auburn Flex -Plan Services, Inc. ("Flex -Plan").
S0906-2
A4.1.10
Reviewed by Council & Committees:
Reviewed by Departments & Divisions:
❑ Arts Commission COUNCIL COMMITTEES:
❑ Building
❑ M&O
❑ Airport ® Finance
❑ Cemetery
❑ Mayor
❑ Hearing Examiner ❑ Municipal Serv.
❑ Finance
❑ Parks
❑ Human Services ❑ Planning & CD
❑ Fire
Cl Planning
❑ Park Board ❑Public Works
❑ Legal
❑ Police
❑ Planning Comm. ❑ Other
❑ Public Works
❑ Human Resources
❑ Information Services
Action:
Committee Approval: ❑Yes ❑No
Council Approval: ❑Yes []No
Call for Public Hearing
Referred to Until
_/_/_
Tabled Until
/ /
Councilmember: Backus
Staff: Heineman
Meeting Date: September 6, 2005
Item Number: VIII.B.10
AUBURN* MORE THAN YOU IMAGINED
RESOLUTION NO. 3 9 0 7
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF AUBURN, WASHINGTON, APPROVING
AND RATIFYING THE FIRST AMENDMENT TO THE
CITY OF AUBURN FLEX -PLAN SERVICES, INC.
("FLEX -PLAN")
WHEREAS, the City of Auburn has approved and implemented a flexible
benefits plan which included provisions dealing with Section 125 of the Internal
Revenue Code; and
WHEREAS, the Internal Revenue Code was amended to allow for a two
and a half month grace period at the end of plan years within which people may
utilize the services that would otherwise be lost if not used; and
WHEREAS, in order to accommodate this new feature, it is appropriate
that the City approve the amendment to the existing agreement.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
HEREBY RESOLVES AS FOLLOWS:
Section 1. The City of Auburn Flex -Plan and its Amendment Number 1
(Flexible Benefits Plan) is approved along with the City of Auburn Cafeteria Plan
and City of Auburn Flexible Spending Account Claim Form incorporated herein
by this reference (Exhibit "A" — Amendment Number 1 to City of Auburn Flexible
Benefits Plan; Exhibit "B" — City of Auburn Summary Plan Description Material
Modifications; Exhibit "C" — Flexible Spending Account Claim Form; and Exhibit
"D" — Grace Period Administration).
Section 2. That a copy of the forms shall be provided to all employees
eligible to participate in the flex plan of this resolution and attachments.
Resolution No. 3907
August 30, 2005
Page 1 of 2
Section 3. That this amendment and the City's plan are hereby
approved and ratified in accordance herewith.
Section 4. The Mayor is hereby further authorized to implement such
administrative procedures as may be necessary to carry out the directives of this
legislation.
Section 5. This Resolution shall be in full force and affect upon passage
and signatures hereon.
Dated and Signed this day of 2005.
CITY OF AUBURN
PETER B. LEWIS
MAYOR
ATTEST:
Danielle E. Daskam,
City Clerk
%,Ity /-%LLV111Cy
Resolution No. 3907
August 30, 2005
Page 2 of 2
EXHIBIT "A"
AMENDMENT NUMBER 1TO
City of Auburn FLEXIBLE BENEFITS PLAN
BY THIS AGREEMENT, Cityof Auburn Flexible Benefits Plan (hereinafter referred to as
the 'Plan") is hereby amended as follows, effective as of August 12, 2005:
Article I entitled 'DEFINITIONS," is amended by the addition of the following definition:
"Grace Period" means, with respect to any Plan Year, the time period ending on the
fifteenth day of the third calendar month after the end of such Plan Year, during which
Medical Expenses incurred by a Participant will be deemed to have been incurred during
such Plan Year.
2. The Section entitled "Health Care Reimbursement Plan Claims" in the Article entitled
"HEALTH CARE REIMBURSEMENT PLAN" is amended by the addition of the
following subsection:
Notwithstanding anything in this Section to the contrary, Medical
Expenses incurred during the Grace Period shall also be deemed to have been
incurred during the Plan Year to which the Grace Period relates. The time for
submission of claims incurred during the Plan Year and the Grace Period for such
Plan Year shall be 90 _days after the end of the Plan Year.
This Amendment has been executed this 12th day of August 2005.
L-A
City of Auburn
EMPLOYER
3. FEE SCHEDULE FOR GRACE PERIOD.
The Company shall pay to Flex -Plan the following fees and costs, for the services and products of
Flex -Plan delivered pursuant to the terms of this Exhibit D, in addition to all fees and costs set
forth in the Plan:
4.1 ADJUSTMENT FEES.
For account adjustments as described in Section 1.2.3, there will be a fee of $65.00 per
transaction.
4.2 ADOPTION FEE.
For adopting the Grace Period in the middle of the plan year, then there shall be a cost to
the company of $200.00. There shall be no fee if the Plan is amended for the following
plan year at the Plan renewal.
"FLEX -PLAN"
FLEX -PLAN SERVICES, INC.
By: Jim Aitken
Title: President
Date: 7/1/2005
"COMPANY"
City of Auburn
A
EXHIBIT "B"
City of Auburn CAFETERIA PLAN
SUMMARY PLAN DESCRIPTION
MATERIAL MODIFICATIONS
INTRODUCTION
City of Auburn has amended your Cafeteria Plan as of August 12, 2005.
This is merely a summary of the most important changes to the Plan. If you have any
questions, contact your Plan's Administrator. A copy of the Plan, including this amendment, is
available for your inspection. If there is any discrepancy between the terms of the Plan or the
amendment itself and this summary of material modifications, the provisions of the Plan, as
amended, will control.
II
SUMMARY OF CHANGES
Claims Payment
Under our current Plan, to receive reimbursement from the Health Care Reimbursement
Plan, you must incur an eligible medical during the Plan Year, which begins January I st and
ends December 31st. Amounts remaining in the account after the end of the Plan Year are
forfeited. Due to changes in the law, effective as August 12, 2005 expenses that you incur on or
before the 15th day of the third month after the end of a Plan Year, will now also be deemed to
have been incurred during the Plan Year. This time after the end of the Plan Year is known as the
"grace period."
In order to be eligible for reimbursement of any expenses, you must submit your claim
within 90 days after the end of the applicable Plan Year. This means that expenses for a Plan
Year, including the grace period, must be submitted by March 31, 2006.
For example, assume you elect an annual benefit under Health Care Reimbursement Plan
of $1,200 for 2005. As of December 31, 2005, you have only incurred $1,000 of eligible
expenses. Prior to the amendment of the Plan, you would forfeit $200. However, under the new
Plan provision, any eligible expenses incurred during the "grace period" will be treated as having
been incurred in both the Plan Year in which the expense was incurred as well as the preceding
Plan Year. Thus, in this example, if you incur an eligible expense of $500 on January 31, 2006
(which is within the "grace period), $200 of the expense would be treated as having been
incurred during the 2005 Plan Year (i.e., you would not forfeit the $200 balance that remained at
the end of the Plan Year), and the remainder of the expense ($300) would be treated as having
been incurred during the 2006 Plan Year.
Dear Flex -Plan Participant,
Your current FSA plan has been amended to include a new 2 % month "Grace Period"
feature for the health care FSA. This Grace Period is different from the 90 day claims
run -out period you have at the end of the plan year to submit claims for the previous year.
This notice is meant to help you understand how this new Grace Period affects your plan
and what you need to do to take advantage of it.
GRACE PERIOD VS. CLAIMS RUN -OUT
Your current FSA plan has a 90 day claims run -out period at the end of each plan year.
Claims for services incurred prior to the end of the plan year must be submitted by the
claims run -out deadline. This feature gives you an additional 2 %2 months after the end of
the plan year to incur expenses. Grace Period expenses are still subject to the claims run
out deadline.
EXAMPLE
For Example: Your old plan year runs January 1, 2005 to December 31, 2005 and you've
re -enrolled for the new plan year, January 1, 2006 to December 31, 2006. You incur an
expense on January 15, 2006. Since the expense was incurred during the 2 % month
Grace Period, your claim can be reimbursed from either the 2005 or the 2006 plan year
account. If the claim is made for the old plan year, it must be submitted prior to the
claims run -out deadline.
HOW TO FILE A CLAIM
All claim forms have the plan year indicated at the top of the page. The claim form you
use will determine which year's account will reimburse your Grace Period expense.
If a claim exceeds the balance of the old year's account, you will need to resubmit the
remaining portion on a claim form for the new plan year.
If you have questions about the new Grace Period, please contact us.
Regards,
Flex -Plan Services, Inc.
Name, First Name
EXHIBIT " C"
FLEXIBLE SPENDING ACCOUNT CLAIM FORM
PLAN YEAR JANUARY 1, 2005 through DECEMBER 31. 2005
MI Day Phone
Address City St Zip
COA
110❑-1111-11EIF]P
Email
Instructions
1. Complete Section I — Employee Information. This form can only be used for services incurred during the plan year shown above. Do not use this
form for BennyT Card transactions. Claims must be submitted at least two (2) full business days prior to the scheduled reimbursement date.
2. Complete Section III — Health Care Claims. Attach proper documentation showing the date(s) of service, type(s) of service and cost (No cancelled
checks, balance forwards or bank card receipts). Do not send original receipts. Itemize all expenses to prevent delays in reimbursement.
3. Complete Section IV - Signing the claim form. Fax or mail a signed claim forth, but do not do both. All claims are stored electronically and paper
copies will be shredded. Online dalms status is available at www.flex-plan.com. Please allow a few days for your claim to be processed.
11]
Service Dates Type of Service I Name of Prqffer For Whom I Neter
bee tKu becaon n s Tor quaeryrng Health uare expenses or consult a tax
advisor for more Information. I Total Health Care FSA Request
10 me M31 or my xnovneage ano DeneT, my statements on this palm form are complete and true. I understand that I am solely responsible for the
validity of claims submitted to my Flexible Spending Account. I am palming reimbursement only for eligible expenses Incurred by myself, spouse and/or
dependants during the plan year shown above and certify that these expenses have not been reimbursed under this plan or by any other source and that
they will not be reimbursed by any other source or Insurance. By providing my email address, I am requesting that all possible communications
Date
Fax completed form and documentation to: Mall forms and documentation to: Flex -Plan Services, Inc.
FAX: (425) 451-7002 or toll-free (866) 535.9227 OR PO Box 70366 Bellevue, WA 98007
Customer Service Line: (425) 452-3500 or (800) 669 -FLEX Visit our Web site at www.flex-olan.com
Rev. 8/12/2005 6:52:00 AM
EXHIBIT D
GRACE PERIOD ADMINISTRATION
This Exhibit D, to that Administrative Services Agreement (the "Agreement") executed between City of
Auburn (the "Company") and Flex -Plan Services, Inc. ("Flex -Plan"), is made effective as of August 12,
2005, and is hereby incorporated into the Agreement, as though fully set forth therein.
By execution of this Exhibit D, the Company has elected to take advantage of, and Flex -Plan has agreed
to supply the services of, the IRS Notice 200542 Grace Period Administration (the "Grace Period") as
further described herein. This Exhibit specifies the services to be provided by Flex -Plan to Company, and
to Company's enrolled eligible employees ("Participants"), in the administration of the Company's new
Grace Period of the Company's Benefit Plan (the "Plan") under I.R.C. Section 125, for use of a Grace
Period following the end of the plan year, and further specifies the responsibilities of the Company and
Participant.
RESPONSIBILITIES OF FLEX -PLAN.
1.1 PLAN AMENDMENT. Flex -Plan shall:
1.1.1 Provide a stand alone amendment for the Company's plan document.
1.1.2 Provide a material modifications to the summary plan description.
1.2 PLAN PROCESSING AND ADMINISTRATION. Flex -Plan shall:
1.2.1 Process Health Care Flexible Spending Account claims up to the 15th day of the
third month following the end of the plan year.
1.2.2 Adjudicate and process claims during the Grace Period based on the dates
indicated on the claim form.
1.2.3 Adjust any claim and associated reimbursement, previously submitted and
processed in accordance with Section 1.2.2 by the Participant, between different
plan years at the Participant's request.
2. TERM OF AGREEMENT.
The Plan, and this Exhibit D, shall be effective during the term set forth in the Plan. Upon
termination of the term thereof, each of the parties agrees that it shall fully comply with the
requirements hereof, and shall complete any then -required performance in a timely manner.