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Elk River <br />Municipal Utilities <br />13069 Orono Parkway • P.O. Box 430 <br />Elk River, MN 55330-0430 <br />February 4, 2010 <br />To: Elk River Municipal Utilities commission <br />John Dietz <br />Jerry Gumphrey <br />Daryl Thompson <br />From: Theresa Slominski <br />Subject: ERMU Flexible Benefits Plan Document <br />Phone: 763.441.2020 <br />Fax: 763.441.8099 <br />Since 1988, Elk River Municipal. Utilities has offered a Flexible Benefits Plan to its <br />employees to be able to exclude from tax medical and dental premiums, and also <br />participate in dependent care and medical expense reimbursement plans that offer tax <br />savings. These plans fall under the IRS regulations for Section 125 Cafeteria Plans. <br />In 2008 a Flexible Benefits Plan Document was adopted, that was compliant with IRS <br />regulations. Changes in the law necessitate revision of that document. The document was <br />drafted with the appropriate changes by Hitesman & Associates (I've included it for your <br />reference), and has been reviewed by our attorneys at Gray, Plant, Mooty. There are a lot <br />of changes that are semantics and/or presentation oriented. Other items that changed or <br />were added are a language related to the increased COBRA obligations of employers <br />(when an employee leaves employment and is allowed to continue on the health <br />insurance at their own expense, now some cases warrant a sharing of the costs), Reservist <br />obligations of employers (for those employees enlisted in reserve duty), and HIPPA <br />information protection (private, nonpublic information specific to employees). The final <br />document for your approval follows. Staff recommends approval. <br />