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REQUEST FOR COUNCIL ACTION <br />Date: June 8, 2020 <br />Item No.: 9.c <br />Department Approval City Manager Approval <br />Item Description: Approve Service Agreement with Medsurety for administration of various <br />Cafeteria Plan benefits <br />1 B ACKGROUND <br />2 Historically, the city has provided optional benefits such as Flexible Spending Accounts (FSA), and <br />3 Dependent Care Assistance Program (DCAP) and Limited Purpose FSAs (LPFSA) to employees <br />4 which are pre-tax accounts employees can contribute money to in order to pay for eligible expenses <br />5 in accordance with IRS regulations. <br />6 <br />7 Previously staff had administered all of these accounts. However, it was determined that in order to <br />8 comply with IRS regulations, staff would be required to verify expenses submitted for <br />9 reimbursement were eligible. Due to the number of employees taking advantage of these benefits, <br />10 that requirement would beunmanageable. The city has partnered with a firm called Medsurety to <br />11 administer these benefits in compliance with IRS and other federalregulations. Additionally, <br />12 Medsurety provides administration and billing for COBRA coverage as well. <br />13 P OLICY O BJECTIVE <br />14 Utilizing a third party administrator limits the potential for inaccurate implementation of these <br />15 benefits, provides for easier processes for employees, and reduces the risk associated with federal <br />16 regulations. <br />17 B UDGET I MPLICATIONS <br />18 The 2020 budget allocates sufficient dollars for implementation of this system. There is a one time <br />19 implementation cost of $250 with an annual renewal cost of $290. In addition, there is a per <br />20 employee/per month (PEPM) cost of $4.50 for the FSA/LPFSA/DCAP and a &.75 PEPM cost for <br />21 COBRA billing. <br />22 <br />23 S TAFF R ECOMMENDATION <br />24 Staff recommends authorizing the City Manager to sign the Service Agreementfor <br />25 FSA/LPFSA/DCAP and COBRA as well as the Business Associate Agrements which are required <br />26 per HIPAA. <br />27 R EQUESTED C OUNCIL A CTION <br />28 Authorize the City Manager to sign the Service Agreement for FSA/LPFSA/DCAP and COBRA as <br />29 well as the Business Associate Agrements which are required per HIPAA. <br />30 <br />31 Prepared by: Rebecca Olson, Assistant City Manager <br />32 Attachments: A: Master Service Agreement <br />33 B: Continuation and Retiree Billing Administration Agreement <br />Page 1 of 1 <br /> <br />