4.9. SR 12-16-2013 - Laserfiche WebLink

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City of Elk Request for Action River To Item Number Mayor and City Council 4.9 Agenda Section Meeting Date Prepared by Consent December 16, 2013 Lauren Wipper, Human Resource Representative Item Description Reviewed by Amend and Restate the City's Flexible Benefits Plan Cal Portner, City Administrator Reviewed by Action Requested • Approve by motion a resolution amending and restating the city's Flexible Benefits Plan effective January 1, 2013. • Approve by motion a resolution amending and restating the city's Flexible Benefits Plan effective January 1, 2014. Background/Discussion The city flexible benefits plan document requires updating on a consistent basis. We contracted with Scott Wold, of Hitesman&Wold to review and update. The first resolution approves a rewrite of our 2013 plan which,while it has been in practice,is effective January 1, 2013. This rewrite incorporates relevant regulatory changes since the last plan modification which was January 1, 2008, as well as the 2013 addition of the Opt-out provision. The second resolution is to amend and restate the plan effective January 1, 2014,with an update to the Health Flexible Spending Arrangement (HFSA). Late this year,the IRS issued a ruling that it will now allow employers to offer an end of year carryover of up to $500 for employees with funds remaining in their HFSA. Originally, HFSAs were a use-it-or-lose-it program where employees lost any funds they set aside but did not spend during the plan year. In 2006 the IRS allowed employers to adopt a Grace Period to provide employees an additional two and one-half months to spend the funds before they were lost. With the addition of the$500 carry-over provision, employers have the choice to offer the carry-over,the grace period, or neither. In evaluating our options it was found that the carry-over provision would be more beneficial to employees and would like to incorporate that beginning with our 2014 plan year. Financial Impact There is no financial impact relating to the changes. The cost of rewriting the plan and preparing the amendment was paid for with funds that were forfeited through the plan in past years. Attachments • Resolution amending and Restating the city's Flexible Benefits Plan effective January 1, 2013. • City of Elk River Flexible Benefits Plan • Resolution amending and Restating the city's Flexible Benefits Plan effective January 1, 2014. • Amendment to City of Elk River Flexible Benefits Plan pawIRI1 0 NaA f RE]