6.5. ERMUSR 01-15-2008 - Laserfiche WebLink

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~/ Elk River ~"' Municipal Utilities 13069 Orono Parkway • P.O. Box 430 Elk River, MN 55330-0430 January 7, 2008 To: Elk River Municipal Utilities commission Jerry Takle Jim Tralle Jerry Gumphrey From: Theresa Slominski Subject: ERMU Flexible Benefits Plan Document Phone: 763.441.2020 Fax: 763.441.8099 Since 1988, Elk River Municipal Utilities has offered a Flexible Benefits Plan to its employees to be able to exclude from tax medical and dental premiums, and also participate in dependent care and medical expense reimbursement plans that offer tax savings. These plans fall under the IRS regulations for Section 125 Cafeteria Plans. On August 3, 2007 the IRS released a comprehensive set of proposed regulations that apply to Section 125 Cafeteria Plans. These new regulations replace and consolidate prior guidance released since the 1980's. The effective date of the new regulations is generally plan years beginning 1/1/2009 or later. Employers also have the option to rely on these new regulations prior to the effective date. Implementing these regulations requires, in our case, a new plan document. This plan document is attached for your review, and approval. Please note, the IRS accepted comments on the new~egulations through November 2007 and it is expected that the IRS will release final regulations in 2008 which will incorporate these comments and related meetings. Some items addressed in the proposed regulations will have to wait until the final regulations are issued before they can be included in the plan document, and have not been addressed in this plan document. In other words, next year there will probably be another revision of this document to consider.