CCP 12-13-2004 - Laserfiche WebLink

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. MEMORANDUM DATE: December 13,2004 Agenda Item 3.B. TO: Honorable Mayor and City Council Members Michelle A. Wolfe, City Administrator Schawn P. Johnson, Assistant to the City Administrator s6 FROM: SUBJECT: Changes to the City's Acclaim Employee Flexible Spending Account Agreement Backl!round It was recently brought to City staff s attention that our Acclaim Benefits Flexible Spending Account CFSA) program is no longer in compliance with federal or state regulations. The FSA program allows employees the opportunity to set aside pre-tax dollars for medical and dental . insurance premiums and health/child care related expenses. The original agreement was instituted on January 1, 1994. Federal and state laws governing flexible spending accounts strongly recommend that the plan holder amend and restate the policy every five to ten years. The original FSA document does not include recent changes in the Federal COBRA, FMLA, ERISA, and HIPP A laws that have been enacted over the last three years. At this time, City employees can elect a maximum of $2,000 to be deducted from their wages on an annual basis through the Acclaim Benefits Flexible Spending Account program. Due to inflationary costs and large increases in health care expenses, City staff recommends that the $2,000 maximum be raised to $3,000. In order for the City to legally make this change and increase the employee FSA contribution limit from $2,000 to $3,000 the City must implement and adopt the recent changes that were enacted by the Federal Government. For your review, I have included the new Flexible Spending Account Plan that was created by Acclaim Benefits, The new FSA plan will bring the City into compliance with federal and state COBRA, FMLA, ERISA, and HIP AA requirements. Staff Recommendations City staff recommends approval of the proposed changes to the City of Arden Hills Flexible Spending Account Plan. . \\EarthIAdmin\Assistant City Administrator\Memo's and Letlers\2004'FSA Changes.DOC