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<br /> <br />Item 6.6. B. <br /> <br />MEMORANDUM <br /> <br />TO: Mayor and City Council <br /> <br />FROM: Lauren Wipper <br />Human Resource Representative <br /> <br />DATE: December 5, 2005 <br /> <br />SUBJECT: Flexible Benefits Plan Amendment <br /> <br />Staff is requesting amendments to the City's Flexible Benefits Plan document to include a grace <br />period for incurring expenses and an increase the maximum allowed contribution for the Health <br />Flexible Spending Arrangement. <br /> <br />This year the Internal Revenue Service issued Notice 2005-42 allowing a two and one-half month <br />grace period extending beyond the end of the plan year to incur expenses. This grace period allows <br />participants to incur expenses through February 15th and apply them to the previous year's plan. <br />Adoption of the attached resolution allows the City to provide this option to plan participants <br />beginning with the 2006 plan year. <br /> <br />In addition, a number of employees have inquired about increasing the maximum dollar amount in <br />the Health Flexible Spending Arrangement plan. The amount has not increased for many years even <br />though medical costs have increased and some employees now elect a health insurance plan that <br />carries a high out of pocket cost. Staff's recommendation is to increase the amount from $2,000 to <br />$3,000. <br /> <br />As well, the amended Flexible Benefits Plan will include regulatory changes that have been made <br />since it was last updated January 1,2004. <br /> <br />Action Requested <br />The Council is asked to approve a resolution allowing a two and one-half month grace period and <br />increasing the maximum to $3,000 for the Health Flexible Spending Arrangement. <br />