HomeMy WebLinkAbout55B - RESO - AMEND FLEX SPENDING PLANREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 6, 2011
TITLE:
ADOPT A RESOLUTION TO AMEND THE
FLEXIBLE SPENDING PLAN AND THE
CITY-SPONSORED EMPLOYEE GROUP
BENEFIT POLICIES
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CITY MANA ER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1s' Reading
? Ordinance on 2nd Reading
? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
FILE NUMBER
Adopt a resolution to amend the Flexible Spending Plan and authorize the City Manager or his
Designee to approve all amendments to City-sponsored employee group benefit policies and plan
documents as needed and required by law, federal health care reform, and/or an adopted
Memorandum of Understanding.
DISCUSSION
The City created a Flexible Benefits Plan effective January 1, 1990, to offer eligible employees an
opportunity to forgo taxable income in exchange for paying for certain health care expenses,
dependent care expenses, and premium expenses on a tax-free basis. The plan was renamed
"The City of Santa Ana Flexible Spending Plan" effective January 1, 2001 and subsequently
amended and restated effective August 1, 2007.
In compliance with the provisions of the Affordable Care Act of 2010 (the umbrella title for the
Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act
aka "health care reform"), the plan must be amended to provide health coverage for children
through age 26 and prohibit the reimbursement of most over-the-counter drugs.
The City has numerous group benefit policies pertaining to the provision of medical, dental, vision,
life, long term disability and flexible spending plans for covered employees. These policies and
their respective plan documents must be amended periodically in compliance with federal, state
and/or local laws, rules and regulations such as the Affordable Care Act of 2010 and in response
to negotiations.
55B-1
Flexible Spending Plan Resolution
June 6, 2011
Page 2
The City Manager or his designee will have the authority to approve all current amendments, as
well as future amendments to the City sponsored employee group benefit plans as required by
law, health care reform, and/or an adopted Memorandum of Understanding as approved by City
Council.
FISCAL IMPACT
There is no fiscal impact associated with this item.
1? - 4 7'., ( , -f? '?-
Kathie Gonzalez
Executive Director
Personnel Services Agency
55B-2
RESOLUTION NO. X
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING
THE FLEXIBLE SPENDING PLAN
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1: The City Council of the City of Santa Ana hereby finds, determines,
and declares as follows:
A. Effective January 1, 1990, the City of Santa Ana adopted its Flexible Benefits
Plan (the "Plan"). The Plan's purpose is to offer eligible employees of the City a
choice between cash and certain non-taxable statutory fringe benefits. The Plan
is available to each current full-time employee and any new full-time employees.
The Plan provides tax-free reimbursement of qualified health care expenses or
dependent care assistance.
B. The Plan provided that "[t]he City, at any time or from time to time, may amend
any or all of the provisions of the Plan without the consent of any Employee or
Participant."
C. Effective January 1, 2001, the City of Santa Ana amended and restated the Plan,
renaming it the "City of Santa Ana Flexible Spending Plan." The Plan continues
to offer eligible employees "an opportunity to forgo taxable income in exchange
for paying for certain health care expenses, dependent care expenses, and
premium expenses on a tax-free basis."
D. Effective August 1, 2007, the City of Santa Ana amended and restated the Plan,
which is substantially similar to the 2001 Plan.
Section 2: The City Council of the City of Santa Ana approves the following
amendment to the Flexible Spending Plan:
A. The amendments set forth in the document titled, "First Amendment to the Plan
Document for the City of Santa Ana Flexible Spending Plan," attached to this
Resolution. This amendment is in response to the Affordable Care Act of 2010
(the umbrella title for the Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act aka "health care reform").
Section 3: The City Council of the City of Santa Ana hereby vests in the City
Manager the authority to approve all current amendments, as well as all future
amendments to the Flexible Spending Plan.
Sect
ion 4: The City Council certifies that the City of Santa Ana will comply with
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applicable Federal, State, and/or local laws, rules, and regulations.
55B-3
Section 5: This Resolution shall take effect immediately upon its adoption by the
City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
Adopted this _ day of , 2011.
Miguel Pulido
Mayor
APPROVED AS TO FORM:
City Attorney's Office
By:
Joseph Straka
Interim City Attorney
AYES: Councilmembers:
NOES: Councilmembers:
ABSTAIN: Councilmembers:
NOT PRESENT: Councilmembers:
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, Maria D. Huizar, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2011-001 to be the original resolution adopted by the City Council of the
City of Santa Ana on 2011.
Date:
Clerk of the Council
City of Santa Ana
55B-4
2010 HEALTH CARE REFORM PROVISIONS AMENDMENT
ARTICLE I
PREAMBLE
Adoption and effective date of amendment. The Employer adopts this Amendment to the
City of Santa Ana Flexible Spending Plan ("Plan") to reflect certain provisions of the Affordable
Care Act of 2010 (the Patient Protection and Affordable Care Act and the Health Care and
Education Reconciliation Act. The sponsor intends this Amendment as good faith compliance
with the requirements of these provisions. This Amendment shall be effective on or after the date
the Employer elects in Section 2.1 or 2.2 below.
1.2 Supersession of inconsistent provisions. This Amendment shall supersede the provisions of
the Plan to the extent those provisions are inconsistent with the provisions of this Amendment.
1 3 Construction. Except as otherwise provided in this Amendment, any reference to "Section" in this
Amendment refers only to sections within this Amendment, and is not a reference to the Plan. The
Article and Section numbering in this Amendment is solely for purposes of this Amendment, and
does not relate to any Plan article, section or other numbering designations.
ARTICLE II
ELECTIONS
2.1 Effective Date for Article III. The provisions of Article III, unless otherwise indicated are effective
as of December 31, 2010.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1 Change in Reimbursement. Effective January 1, 2011, the Plan's definition of "Medical
Expenses" under the Health Care Reimbursement Arrangement or Health Flexible Spending
Account is amended by the addition of the following:
Notwithstanding anything in the Plan to the contrary, a Participant may not be reimbursed for the
cost of any medicine or drug that is not "prescribed" within the meaning of Code Section 106(f) or
is not insulin. In addition, only medicine or drugs considered to be prescription drugs under Code
Section 106(f) (not "over-the-counter" drugs obtained under prescription) shall be able to be
purchased by debit and/or credit cards issued to be used in conjunction with the Plan. "over-the-
counter" medicine or drugs, even with a prescription, cannot be purchased by debit and/or credit
card.
3.2 Dependent. The Plan's definition of "Dependent" is amended by the addition of the following:
"Dependent" shall include any child of a Participant who is covered under an Insurance Contract,
as defined in the Contract, [or under the Health Flexible Spending Account] as allowed by reason
of the Affordable Care Act.
Page 1 of 2 12/2010
55B-5
A Participant's "Child" includes his natural child, stepchild, foster child, adopted child, or a child
placed with the Participant for adoption. An Employee's Child will be an eligible Dependent until
reaching the limiting age of 26, without regard to student status, marital status, financial
dependency or residency status with the Participant or any other person. When the child reaches
the applicable limiting age, coverage will end at the end of the calendar year.
The phrase "placed for adoption" refers to a child whom the Participant intends to adopt, whether
or not the adoption has become final, who has not attained the age of 18 as of the date of such
placement for adoption. The term "placed" means the assumption and retention by such
Participant of a legal obligation for total or partial support of the child in anticipation of adoption of
the child. The child must be available for adoption and the legal process must have commenced.
3.3 Dependent. The Plan's Change in Status provisions are amended by the addition of the following:
Notwithstanding anything in this Section to the contrary, the gain of eligibility or change in eligibility
of a child up to the end of the year in which a child attains age 26, as allowed under Code
Sections 105(b) and 106 and IRS Notice 2010-38, shall qualify as a change in status.
This amendment has been executed this day of
Name of Employer: City of Santa Ana
By:
City Manager
Page 2 of 2
1'2/2010
55B-6
CERTIFICATE OF ADOPTING RESOLUTION
The undersigned authorized representative of The City of Santa Ana hereby certifies that the
following resolutions were duly adopted by Employer on December 31, 2010, and that such
resolutions have not been modified or rescinded as of the date hereof;
RESOLVED, that the Amendment to the City of Santa Ana Flexible Spending Plan (the
Amendment) is hereby approved and adopted, and that an authorized representative of the
Employer is hereby authorized and directed to execute and deliver to the Administrator of the Plan
one or more counterparts of the amendment.
The undersigned further certifies that attached hereto is a copy of the Amendment approved
and adopted in the foregoing resolution.
Date:
Signed:
[print name/title]
Page I of I
12/2010
55B-7
SUMMARY OF MATERIAL MODIFICATIONS
for the
City of Santa Ana Flexible Spending Plan
I
INTRODUCTION
This is a Summary of Material Modifications regarding the City of Santa Ana Flexible
Spending Plan ("Plan"). This is merely a summary of the most important changes to the Plan
and information contained in the Summary Plan Description ("SPD") previously provided to you.
It supplements and amends that SPD so you should retain a copy of this document with your
copy of the SPD. If you have any questions, contact the Administrator. If there is any
discrepancy between the terms of the Plan, as modified, and this Summary of Material
Modifications, the provisions of the Plan will control.
II
SUMMARY OF CHANGES
Medical expenses:
Effective January 1, 2011, you may not request reimbursement of "over-the-counter' drugs
unless the drug is insulin or the drug is prescribed for you for treatment of a medical condition.
You cannot use debit and/or credit cards to purchase "over-the-counter' drugs, even with a
prescription.
Definition of "child":
Effective January 1, 2011 you may be reimbursed for insurance coverage for medical expenses]
for any child until the end of the calendar year in which the child reaches age 26. A child is a
natural child, stepchild, foster child, adopted child, or a child placed with you for adoption. If a
child gains or regains eligibility due to these new rules, that qualifies as a change in status to
change coverage.
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55B-8