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97-1393CouncSi File # Green Sheet # Presented By: Referred To: t z 3 4 s 6 � s 9 10 12 1J 14 15 16 17 48 19 20 21 22 23 24 25 26 27 28 Whereas, the City OF Committee: Date health and weifare benefii program services to emptoyees and retirees, and Whereas, the City wishes to establish a special fund and spending pian for the improved benefit program services, and Whereas, the City wants to compiy with all Fede21 regutatians govem7ng cafeteria plans, and �a Whereas, the City wishes to fund the building improvements necessary to transfer the workers' compensation function from the City Attomey's �ce to the Deparpnent of Technofogy and Management Services, Risk Mgmt Division, and Whereas, fhe Mayor, pursuant to Section t0.07.1 of the City Charter, recommends the foilowing changes to the 1997 Adopted Budget fat the City of Saint Paul: CURRENTBUDG£T CHANGES AMENDEDBUDGET ..ivu� .... .. .. ..,..,.... ,_. ..,:.:.�. : .. ...,. �•:. . . .- w �� a ... .._.. .. e, ,. , , � . �: GENERAI. FUND (Amentlment) FINANCING: Technobgy a�M Managemerit Serviees 001-0'13T0�6915 Riak Managemenq rePontl (OCA, Inc.) 001413703915 Risk Managament, re(wW (M[rtn Mutuaq Tohl Fund Change SPENDING: Technology and ManagemaM Serviees 001-01370-0111 • Risk Managemenk satarias 001-01370-0d39 -Risk ManagemaM, fringe henefib 001-01370A898 -Risk Managemen4 6uilding improvemenfs 4 52.218.G3 a 39,000.00 a 71,218A3 502,975.00 28,169.43 169,482.00 7,907A0 10 000 00 97 -/,3�3 ?9Rio 32,216.43 39,000.00 77,218.43 511,144.43 177,369.00 29 � � 35,142.00 45.142.00 30 TataiFund Chan9e 682,457.00 71,218.43 755,575.43 s� sz 3s Be it resolved, that the City Councit approves these actions and changes to the 1997 budgeL sa 35 Requested by Department of. � Technology and Mana ement Services l-/ V U\t�,V ��'-- �\ BY� +�AIJ-�Q-✓� ApRrovat Recommended by Budget Director. Adopted by Cauncii: Date �� 4 L �,qc`� -} 4doption Certified by Councii Secretary: 3 y' �� ' � t� �pproved by Mayor. Date _ � ( z � �_' y; �' Se'vifPaWBUtlpelOTC!( IPne N:WSEftSBVOGEIIOEPTS�FINnNCEt12lW13lORE5.W1(t SI01/9n , Technology & Mgmt ServicesfRisk Mgmt 9�-�39.3 ��10 May13 ,,ss� GREEN SHEE INRIAUDATE INRIAUDATE � Q��ApT�'�E'�T��aELTOR �CRYCOUNCIL IIJYB R FOR � Cm A�ORNEY O CS7Y CIERK -�� IOUTNG BUDGET OIREGfpq � FIN. d MfaL SEAVIC OIR �aoex ��p � g�- fn.ServiceslAcctg. - - - ---------_ TOTAL # OF SlGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATUR� ACTION AEOUESTED: Deposit funds from Minnesata Mutual and DCA, inc. to correspond with tfie Risk Management Division's spenrJ'ing plan. _ PUNNING COMMISStON _ CMLSEflVICE CAMMISSION _ CIB COMMITTEE _ STAFF .. ' `___�_ _ . . . _ DISTRILTCOURT SUPPOqTg WNiCN COUNCIL O&IECTNEI PEASONAI SE(iVICE CONTRACTS MUST ANSWER TNE fOLLOWING GUESTONS: 7. Has Mis persoMrcm pvpr wprgeE untler a rantract tor this depertment? _. - " YES 'NO • - . 2. Has this parson/firm ever heert a ag empWyee? . .�. - -� YES NO . .. _ - -- 3. Does this persoMrm possess a SW71 not nortnally ppssessed py eny curre�� it�, amplayee? �. YES NO . - _ _ _ .. _ ._ , . . ... - Eapleln ali yes answera on separats ahast �nd attaeh to yrsen sheat � � ��.vm.a rnw�em. uaut. VrrF�NiVNfTY(Wno. What WMn. Where.Why): --- To provide an additional benefit staff person in order to assure that the City cao impiemeM the new Health Insurence Portabilify - Act of i996, Federai law, effective June 1, 1997; provide backup services during the training and implementation phase of the Human Resource/Payrofl/Benefit Project; investigate additional employee optionai benefits the City may want to consider; and, ,,; research the cost of out-sourcing certain benefit administrative functions. Funds are necessary tor buifding improvements to '' accommodate this additionat staft person and four additional emptoyees trensferred by Councit action from the City Attorney's ' OHice to Risk Management (the Workers' Compensation function). , :. ... :-��. The City will maintain compiiance with ali Federal, State, and Socal laws and ail bargaining unit agreements in the administretion of the health and welfare program. Use of cafeteria pian funds within compGance of 26 USC 125. Funds wouid 6e available for Workers' Compensation transfer-related necessary building improvements. tdEC�t�Ett No�e NOV 06 1�97 f' s. � 1c �. acc �.. ti(! n►OV 10 �997 Disruption of service in the provision of benefit programs to employees and retirees would occur; participation of benefits staff in the Human Resource/Payroll/Benetit Project would end; consideration of improving both the leve! and cost of benefit administration would not happen; and, funds from some other source would have to be found to pay for the Workers' Compensation transfer related to buiiding improvements. COTAl0.MOUNTOFTRANSACTION S 7� 95R49 COS7/REVENUEBUDGETED(CIRCLEONE) YES NO 'UND�HG SOtlACE GL 001 AC71VI7Y NUMBER 01370 INA f' luseislgaugnanS Vesoladmlgrn.sht �� , ' ..`.'..;..."._.-." . ,' '�,-- .. : . . .�'�``- " . �� ;�:.:�:: . � z Q � �'`-_:: :...:;.:.:'.." : .., ;_ :- �-:; -.. . - ; ..�17-:/�3R3._;. !�'�" _ : _ . - : : __ .:. t �v'� -- rn � YN��r �- -. := = � = �=��ti�il -- � = 2 o- `z m5 " - ::_\_� `> � c.; �_ .�i __�:�`? Q «�n' -:v (2:_-?:=-a-�.�: ;�e.. :' �f m ¢ C � '_: 'sf�: �;''_` =�:."-��.: _'.:.,-: e. m ' " - ' > .x-: ltt 2 `o�, 2 �' = h -, `CS _ ,".. � [�- u' := _-:: . �a' _s- � x� ' [0 -_ � � r � : =." O 3�. Q " _ y��.�� "' US �,,. -�_. � ^ � � _' -- -',O i_::;r�i ��=`15;; _= _ �':1. �=v :=� Q " - .i;l. _ �" -= Y„_._..�^-,-..`;`V z a � ' ' � - __ �. - - � m - �`tf ' � � _ - _ . : N, .: � ..-_ � . . :'' rfl _ -: _�k'?_'.::'-;;'r,;-=::;'__=' � :. �, .., . . ,._ �_.i:_`.:__:�,:�,"'-_:`,` O - ` � � � �__ - �� _ _�� ;.� � _ _. Q . -�� x � � a n, o x , � __-, 3 -. 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' . . - ' " . . . . . . � . . . _ . . . . . ' a� < � . . �. - � . . ' . �" - -_ - - -'��c::� �....- -- -- m� - - _ - - - ' �•"' �N � _ - '- _ - :^�:+:?'_: ' 6l -i - " _ ' m - m - - 9 - D ' TZ - _ � f.�' __ 9F ' _ ' ' - e ' - � - ^�r�: a' u`.' : : �.:�� _`?; ;: =''� '=;;�;'i:: � : d - . r_ _, z .. z� � •%, �:: SD � . . . . _ -' '� ". " 41 Z .,�t�. �'� . mv ' . . � � � � , . �. �a . . � . ' � �' �\ v�i � . ' � � . ' - ' " . . - . �. �� . . ' . -' ' - "' /� _ _..�_� .. . _ ..: *�._.�'�_..,,,�,�,-'�-�,� ��,��Y' _ � ' - -.. .._ _ _ - :�_;..:. . �;: �� _:, .,�:� , - :�-.w�,` - _--.i:�:..:..:�.�_ _ . ff: � �j;;,� ,��.. : � �.�=_��--;- � -- - = �VOLUME= -�-- -- - � M � -- � ;� == �_ �� -_��.. �` _ � R .'�.` o .o> '?' .r x;:: ,� - . fd � 3!..-'.Rq � ✓ �� y ." .� . � ��.-.�T�"t F � .��awt.�. �T-. ._ �-....e�it�. �.e'�SH",�Y� � �f � - . �"�'�-��'i.N�` �•� � _ . �s'�A..,4: -_ �.:sx,� . " -' �._� _; {F . � ' � ' - _ .�....,�..._ '" �.�� a.,s ' :��`'�'-,.a_,' '-'"� � - � � � � �� -- '�;-_;:"'� � .�" � � � "�,� � ='�s.3°�"�--: '+4- �wc - '°t �a � ' "='� ± ,'. r � er`. a3 - � �� ' .. _ ��"��'' --�.�'-...,'�.`,.'��. """"_ a - � + � � � '. " .� ;�... `' ' F -_�:, _ q, . ��.�� '-` �°'',� _;� - ,:� _ �� _ ,�.�^--- 3 � °="` .-�--�� - � - - �;- ` - � - :3'�'- :� ' a._�. _ _ � ��_-:: _ i �__.r:r.. _.--- = - - - ' .� - I Y^:-:_:. �.- �.�...� -- - .�.. ,� .�. � - � =- :t �" � � ��..w _ z�_>._. �r- :� _ �-.�.-<,-.-_{ --- - - _�_.:,_` _� - -_- - . y: �tZ^ . _ . >i+i� �+w� � C ` �.�.'�'_ ?F n. ' - .� � c_. _... _ - . � r . ;_. � a'�.e�.. . �. - - : - .. . .. . .. . ...:.i.. ' . t..�-�. _ . .. . . ._.. _ ... � _...�. . _,. � Y.+�.�.ti . . . . .. -. _ � � _ :-. ... . , _ - . �:e. . . _ ... _ . . _ '_ _ __ � ._.._.. _ +��i'a`�.+�v '..J�...��....:.�.a � - t�av_ ,_ . ._ �. ,� c.."j£ �� g � DEStGN= � � -- � .� � =�v,� � ; ,�1)NDiN G, AND �� . � �-�ADMINIS�TRA � � � . -�-- _ � � �� . -��- - .�� .. 1�N� �. � �.y�, �� : � ,� ..._ . -_ � ___,.-T .-_ - _,_, _��_..: : � _? �:. - ,.��N - t� - .. .... _ �. __,.�.. _ _ �, �, �-r - -. _ __ = - - -- -- - _-� . �.:. � _ F^r- r3� r+ �°� - THIRD�� - � -y � ��, =.�..-� . � -�;�, �.-�-�- _,�,.��---�. -� ---� . , <_. :_.�--a-p..,� - =�.= :� _ ��. � �«� i . ��..��..:�� -� - � - � �� "�- r =, x � `�^` � �� Y .�in„-' ��"�"�y�� 'L � .. � �� i: l �K .. '. .� - ' .-�"'� .„y.`�__', - • -�-_ � 4 _ � � S �acnq _°U�y` � �S ';?'�'� . . ' p.�' y ' . . _ . �3atLF� � .Lin �.. '. ln� " i ^�`�T�✓^�� y ^y Ve�".'i+ �^� _ m � S .u. - � � �� k4 rn��4.. .� � �'.�.�'a.-y�..^�.. .��.� ' S. _ a. _ 4- Yi, _��- 6 S�+r.` :el ,� F%F".' _ _ i�`�`;.v"fiL'Y':. `•^c '_�v+� _ ._�"_" � _ �ROS�NB � � ERR�Yry=S:-� �__ _ LOOM ` �:s : —•>: �-.,. - ----------- E „ , � `�'�_ "�T� ��-�._.� ;� '—" � „�� - � _ � r3:n _,,.'$.-�� -"-,..,,::':`^_r.�,' � z : = .....m...�......c.e.-Sc�< - i, _...ww .i .:. - � " ry :. � '�. .. , -:`�'=...:�� .ra :.:;:- -�-i�3�3 � Chapter 29 Cafeteria Approaches tc genefrt Planniny gp� expense plan, medical expenses not covered by the employer's plan, and dependent care cxpenses. The amount of any salary reduction is crediced to an employee's reimbursement account, and benefics are paid from this account when an employee proRerly files for such reimbursement. The amavnt of the salary reduction must be specified on a benefit-by-benefit basis prior to the beginning of the plan year during an enrollment period. Once made, changes are allowed only under certain circumstances discussed later in this chapter. One issue faced by employers had been whether to limit benefit paymenu to the amount of a current account balance or allow an employee at any time during the year to receive benefics equal to the amount of his or her tota! annual salary teduction. For example, if an employee con- tributed $50 a month to an FSA to cover the cost of unreimbursed medical expenses, during the first month of the pIan there would be only 550 of � the 5600 annuai contribution in the account. If the emQloyee incurred g�9p ' of unreimbuned medical expenses during the monch, shouid he or she be , allowedareimbursementofS50orthefu115400?T'heobjectiontoallowing • a$400 reimbursement is that [he employer would lose 5350 if the employee teaninated employment before making any further contribvtions. Conse- quendy most plans limited aggregate benefits to the total contributions made at the time benefiu aze received. However, a recent IRS regulation changed the rules, and medical and dental expense FSAs now must allow an amount equal to the full annual contribution for these benefits to be taken < az benefits any[ime during the yeaz. Therefore the employee in the previons =� e�mP1e would be entided to a benefit payment of 540p afrer the first �� month. However, this regulation dces noc apply to other rypes of benefiu �; such as dependent caze under an FSA, and employers still have a choice ; of reimbursement poIicies for these. If the monies in an FSA are not used during the p1an year, they .aze :,. forfeited and belong to the employer. Some employers keep the forfeited ':. money and use it to offset the cost of administering the FSA program. ' xQwevez, aimost anything can be done with the money, except giving it � b�� individually to the persons who have forfeited it. Some employers `��e it to chariry, pt}�ers credit it on a pro rata basis to the accounts of a[I ' Participants in the FSA program for the foilowing yeaz or use it to reduce� �� benefit costs for all employees. �f An election to pazGcipate in an FSA not only reduces salary for �ral income tax pnrposes, it also ]owers the wages on which Social �.. � -`-�" � �l S�. .i. ' ' �_ -�..�n�': _ .v_�"_� _ . �'- . �`rt ...x� � • ��::: „ �� . . rt' "T,,�::' ' - >. . y ' '`�.Y-- _-"'r� - _ � � - �� _-��._' � 600 Part 7 Cafeteria Benefit Pians ` "^°j.� f.� . � ' - .'s.e, - y x"'; :�.v-_ --_=;: -,; :-. >- _ credits aze insuf6cient to purchase the desired benefits, additional amount can be conuibuted on a payroll-deduction basis. A variation of this approach is to have the core plan be an "average' plan for which the employee makes no concribution. 1'he employee ther may receive credits if certain benefits aze reduced. These credits can be used either to increase other benefits or, if the plan_aifows, to increue cash compensation. Modular Plans Another type of pian allows an employee a choice among severa; predesigned benefit packages. Typically, at least one of the packages �;�� involves no emgloyee cost; and if an employee selecu a more expensive package,-the employee contributes to the cost of the package. Some employers may atso inclvde a bare-bones benefit package which results in cash being paid to an employee who selects it. Under some plans using this "modulaz" approach, the predesigned packages may have significant differences, some being superior to others in certain respects, and inferior in others. Other glans using this approach have virtuatly idzntical packaees, with the major difference being in the options offered for medical expense coverage. For example, the plan of one large bank offers three traditionat insured plans, two HMOs, and a prefeaed provider organization. F7e�ble Spending Accounts Section 125 also allows employees to purchase certain benefia on a before-tax basis through the use of a Sexible spending (reimbursement; account. FSAs, which technicaliy aze cafeteria plans, can be used by themselves or incorporated into a more comprehensive cafeteria plan- They aze most common3y used alone by small employers who, primarily for cost reasons, are unwilling or unable to establish a broader plan. The cafeteria plans of most large emptoyers contain FSAs as an integral p�'t of the plan, An FSA alIows an employee to fund certain benefits on a before-tax basis through a satary reduction, which then is used to fund the cost of any quaiified benefiu that are included in the plan. However, they most commonly aze used for employee contributions to the employer's medical CouncSi File # Green Sheet # Presented By: Referred To: t z 3 4 s 6 � s 9 10 12 1J 14 15 16 17 48 19 20 21 22 23 24 25 26 27 28 Whereas, the City OF Committee: Date health and weifare benefii program services to emptoyees and retirees, and Whereas, the City wishes to establish a special fund and spending pian for the improved benefit program services, and Whereas, the City wants to compiy with all Fede21 regutatians govem7ng cafeteria plans, and �a Whereas, the City wishes to fund the building improvements necessary to transfer the workers' compensation function from the City Attomey's �ce to the Deparpnent of Technofogy and Management Services, Risk Mgmt Division, and Whereas, fhe Mayor, pursuant to Section t0.07.1 of the City Charter, recommends the foilowing changes to the 1997 Adopted Budget fat the City of Saint Paul: CURRENTBUDG£T CHANGES AMENDEDBUDGET ..ivu� .... .. .. ..,..,.... ,_. ..,:.:.�. : .. ...,. �•:. . . .- w �� a ... .._.. .. e, ,. , , � . �: GENERAI. FUND (Amentlment) FINANCING: Technobgy a�M Managemerit Serviees 001-0'13T0�6915 Riak Managemenq rePontl (OCA, Inc.) 001413703915 Risk Managament, re(wW (M[rtn Mutuaq Tohl Fund Change SPENDING: Technology and ManagemaM Serviees 001-01370-0111 • Risk Managemenk satarias 001-01370-0d39 -Risk ManagemaM, fringe henefib 001-01370A898 -Risk Managemen4 6uilding improvemenfs 4 52.218.G3 a 39,000.00 a 71,218A3 502,975.00 28,169.43 169,482.00 7,907A0 10 000 00 97 -/,3�3 ?9Rio 32,216.43 39,000.00 77,218.43 511,144.43 177,369.00 29 � � 35,142.00 45.142.00 30 TataiFund Chan9e 682,457.00 71,218.43 755,575.43 s� sz 3s Be it resolved, that the City Councit approves these actions and changes to the 1997 budgeL sa 35 Requested by Department of. � Technology and Mana ement Services l-/ V U\t�,V ��'-- �\ BY� +�AIJ-�Q-✓� ApRrovat Recommended by Budget Director. Adopted by Cauncii: Date �� 4 L �,qc`� -} 4doption Certified by Councii Secretary: 3 y' �� ' � t� �pproved by Mayor. Date _ � ( z � �_' y; �' Se'vifPaWBUtlpelOTC!( IPne N:WSEftSBVOGEIIOEPTS�FINnNCEt12lW13lORE5.W1(t SI01/9n , Technology & Mgmt ServicesfRisk Mgmt 9�-�39.3 ��10 May13 ,,ss� GREEN SHEE INRIAUDATE INRIAUDATE � Q��ApT�'�E'�T��aELTOR �CRYCOUNCIL IIJYB R FOR � Cm A�ORNEY O CS7Y CIERK -�� IOUTNG BUDGET OIREGfpq � FIN. d MfaL SEAVIC OIR �aoex ��p � g�- fn.ServiceslAcctg. - - - ---------_ TOTAL # OF SlGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATUR� ACTION AEOUESTED: Deposit funds from Minnesata Mutual and DCA, inc. to correspond with tfie Risk Management Division's spenrJ'ing plan. _ PUNNING COMMISStON _ CMLSEflVICE CAMMISSION _ CIB COMMITTEE _ STAFF .. ' `___�_ _ . . . _ DISTRILTCOURT SUPPOqTg WNiCN COUNCIL O&IECTNEI PEASONAI SE(iVICE CONTRACTS MUST ANSWER TNE fOLLOWING GUESTONS: 7. Has Mis persoMrcm pvpr wprgeE untler a rantract tor this depertment? _. - " YES 'NO • - . 2. Has this parson/firm ever heert a ag empWyee? . .�. - -� YES NO . .. _ - -- 3. Does this persoMrm possess a SW71 not nortnally ppssessed py eny curre�� it�, amplayee? �. YES NO . - _ _ _ .. _ ._ , . . ... - Eapleln ali yes answera on separats ahast �nd attaeh to yrsen sheat � � ��.vm.a rnw�em. uaut. VrrF�NiVNfTY(Wno. What WMn. Where.Why): --- To provide an additional benefit staff person in order to assure that the City cao impiemeM the new Health Insurence Portabilify - Act of i996, Federai law, effective June 1, 1997; provide backup services during the training and implementation phase of the Human Resource/Payrofl/Benefit Project; investigate additional employee optionai benefits the City may want to consider; and, ,,; research the cost of out-sourcing certain benefit administrative functions. Funds are necessary tor buifding improvements to '' accommodate this additionat staft person and four additional emptoyees trensferred by Councit action from the City Attorney's ' OHice to Risk Management (the Workers' Compensation function). , :. ... :-��. The City will maintain compiiance with ali Federal, State, and Socal laws and ail bargaining unit agreements in the administretion of the health and welfare program. Use of cafeteria pian funds within compGance of 26 USC 125. Funds wouid 6e available for Workers' Compensation transfer-related necessary building improvements. tdEC�t�Ett No�e NOV 06 1�97 f' s. � 1c �. acc �.. ti(! n►OV 10 �997 Disruption of service in the provision of benefit programs to employees and retirees would occur; participation of benefits staff in the Human Resource/Payroll/Benetit Project would end; consideration of improving both the leve! and cost of benefit administration would not happen; and, funds from some other source would have to be found to pay for the Workers' Compensation transfer related to buiiding improvements. COTAl0.MOUNTOFTRANSACTION S 7� 95R49 COS7/REVENUEBUDGETED(CIRCLEONE) YES NO 'UND�HG SOtlACE GL 001 AC71VI7Y NUMBER 01370 INA f' luseislgaugnanS Vesoladmlgrn.sht �� , ' ..`.'..;..."._.-." . ,' '�,-- .. : . . .�'�``- " . �� ;�:.:�:: . � z Q � �'`-_:: :...:;.:.:'.." : .., ;_ :- �-:; -.. . - ; ..�17-:/�3R3._;. !�'�" _ : _ . - : : __ .:. t �v'� -- rn � YN��r �- -. := = � = �=��ti�il -- � = 2 o- `z m5 " - ::_\_� `> � c.; �_ .�i __�:�`? Q «�n' -:v (2:_-?:=-a-�.�: ;�e.. :' �f m ¢ C � '_: 'sf�: �;''_` =�:."-��.: _'.:.,-: e. m ' " - ' > .x-: ltt 2 `o�, 2 �' = h -, `CS _ ,".. � [�- u' := _-:: . �a' _s- � x� ' [0 -_ � � r � : =." O 3�. Q " _ y��.�� "' US �,,. -�_. � ^ � � _' -- -',O i_::;r�i ��=`15;; _= _ �':1. �=v :=� Q " - .i;l. _ �" -= Y„_._..�^-,-..`;`V z a � ' ' � - __ �. - - � m - �`tf ' � � _ - _ . : N, .: � ..-_ � . . :'' rfl _ -: _�k'?_'.::'-;;'r,;-=::;'__=' � :. �, .., . . ,._ �_.i:_`.:__:�,:�,"'-_:`,` O - ` � � � �__ - �� _ _�� ;.� � _ _. Q . -�� x � � a n, o x , � __-, 3 -. 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' . . - ' " . . . . . . � . . . _ . . . . . ' a� < � . . �. - � . . ' . �" - -_ - - -'��c::� �....- -- -- m� - - _ - - - ' �•"' �N � _ - '- _ - :^�:+:?'_: ' 6l -i - " _ ' m - m - - 9 - D ' TZ - _ � f.�' __ 9F ' _ ' ' - e ' - � - ^�r�: a' u`.' : : �.:�� _`?; ;: =''� '=;;�;'i:: � : d - . r_ _, z .. z� � •%, �:: SD � . . . . _ -' '� ". " 41 Z .,�t�. �'� . mv ' . . � � � � , . �. �a . . � . ' � �' �\ v�i � . ' � � . ' - ' " . . - . �. �� . . ' . -' ' - "' /� _ _..�_� .. . _ ..: *�._.�'�_..,,,�,�,-'�-�,� ��,��Y' _ � ' - -.. .._ _ _ - :�_;..:. . �;: �� _:, .,�:� , - :�-.w�,` - _--.i:�:..:..:�.�_ _ . ff: � �j;;,� ,��.. : � �.�=_��--;- � -- - = �VOLUME= -�-- -- - � M � -- � ;� == �_ �� -_��.. �` _ � R .'�.` o .o> '?' .r x;:: ,� - . fd � 3!..-'.Rq � ✓ �� y ." .� . � ��.-.�T�"t F � .��awt.�. �T-. ._ �-....e�it�. �.e'�SH",�Y� � �f � - . �"�'�-��'i.N�` �•� � _ . �s'�A..,4: -_ �.:sx,� . " -' �._� _; {F . � ' � ' - _ .�....,�..._ '" �.�� a.,s ' :��`'�'-,.a_,' '-'"� � - � � � � �� -- '�;-_;:"'� � .�" � � � "�,� � ='�s.3°�"�--: '+4- �wc - '°t �a � ' "='� ± ,'. r � er`. a3 - � �� ' .. _ ��"��'' --�.�'-...,'�.`,.'��. """"_ a - � + � � � '. " .� ;�... `' ' F -_�:, _ q, . ��.�� '-` �°'',� _;� - ,:� _ �� _ ,�.�^--- 3 � °="` .-�--�� - � - - �;- ` - � - :3'�'- :� ' a._�. _ _ � ��_-:: _ i �__.r:r.. _.--- = - - - ' .� - I Y^:-:_:. �.- �.�...� -- - .�.. ,� .�. � - � =- :t �" � � ��..w _ z�_>._. �r- :� _ �-.�.-<,-.-_{ --- - - _�_.:,_` _� - -_- - . y: �tZ^ . _ . >i+i� �+w� � C ` �.�.'�'_ ?F n. ' - .� � c_. _... _ - . � r . ;_. � a'�.e�.. . �. - - : - .. . .. . .. . ...:.i.. ' . t..�-�. _ . .. . . ._.. _ ... � _...�. . _,. � Y.+�.�.ti . . . . .. -. _ � � _ :-. ... . , _ - . �:e. . . _ ... _ . . _ '_ _ __ � ._.._.. _ +��i'a`�.+�v '..J�...��....:.�.a � - t�av_ ,_ . ._ �. ,� c.."j£ �� g � DEStGN= � � -- � .� � =�v,� � ; ,�1)NDiN G, AND �� . � �-�ADMINIS�TRA � � � . -�-- _ � � �� . -��- - .�� .. 1�N� �. � �.y�, �� : � ,� ..._ . -_ � ___,.-T .-_ - _,_, _��_..: : � _? �:. - ,.��N - t� - .. .... _ �. __,.�.. _ _ �, �, �-r - -. _ __ = - - -- -- - _-� . �.:. � _ F^r- r3� r+ �°� - THIRD�� - � -y � ��, =.�..-� . � -�;�, �.-�-�- _,�,.��---�. -� ---� . , <_. :_.�--a-p..,� - =�.= :� _ ��. � �«� i . ��..��..:�� -� - � - � �� "�- r =, x � `�^` � �� Y .�in„-' ��"�"�y�� 'L � .. � �� i: l �K .. '. .� - ' .-�"'� .„y.`�__', - • -�-_ � 4 _ � � S �acnq _°U�y` � �S ';?'�'� . . ' p.�' y ' . . _ . �3atLF� � .Lin �.. '. ln� " i ^�`�T�✓^�� y ^y Ve�".'i+ �^� _ m � S .u. - � � �� k4 rn��4.. .� � �'.�.�'a.-y�..^�.. .��.� ' S. _ a. _ 4- Yi, _��- 6 S�+r.` :el ,� F%F".' _ _ i�`�`;.v"fiL'Y':. `•^c '_�v+� _ ._�"_" � _ �ROS�NB � � ERR�Yry=S:-� �__ _ LOOM ` �:s : —•>: �-.,. - ----------- E „ , � `�'�_ "�T� ��-�._.� ;� '—" � „�� - � _ � r3:n _,,.'$.-�� -"-,..,,::':`^_r.�,' � z : = .....m...�......c.e.-Sc�< - i, _...ww .i .:. - � " ry :. � '�. .. , -:`�'=...:�� .ra :.:;:- -�-i�3�3 � Chapter 29 Cafeteria Approaches tc genefrt Planniny gp� expense plan, medical expenses not covered by the employer's plan, and dependent care cxpenses. The amount of any salary reduction is crediced to an employee's reimbursement account, and benefics are paid from this account when an employee proRerly files for such reimbursement. The amavnt of the salary reduction must be specified on a benefit-by-benefit basis prior to the beginning of the plan year during an enrollment period. Once made, changes are allowed only under certain circumstances discussed later in this chapter. One issue faced by employers had been whether to limit benefit paymenu to the amount of a current account balance or allow an employee at any time during the year to receive benefics equal to the amount of his or her tota! annual salary teduction. For example, if an employee con- tributed $50 a month to an FSA to cover the cost of unreimbursed medical expenses, during the first month of the pIan there would be only 550 of � the 5600 annuai contribution in the account. If the emQloyee incurred g�9p ' of unreimbuned medical expenses during the monch, shouid he or she be , allowedareimbursementofS50orthefu115400?T'heobjectiontoallowing • a$400 reimbursement is that [he employer would lose 5350 if the employee teaninated employment before making any further contribvtions. Conse- quendy most plans limited aggregate benefits to the total contributions made at the time benefiu aze received. However, a recent IRS regulation changed the rules, and medical and dental expense FSAs now must allow an amount equal to the full annual contribution for these benefits to be taken < az benefits any[ime during the yeaz. Therefore the employee in the previons =� e�mP1e would be entided to a benefit payment of 540p afrer the first �� month. However, this regulation dces noc apply to other rypes of benefiu �; such as dependent caze under an FSA, and employers still have a choice ; of reimbursement poIicies for these. If the monies in an FSA are not used during the p1an year, they .aze :,. forfeited and belong to the employer. Some employers keep the forfeited ':. money and use it to offset the cost of administering the FSA program. ' xQwevez, aimost anything can be done with the money, except giving it � b�� individually to the persons who have forfeited it. Some employers `��e it to chariry, pt}�ers credit it on a pro rata basis to the accounts of a[I ' Participants in the FSA program for the foilowing yeaz or use it to reduce� �� benefit costs for all employees. �f An election to pazGcipate in an FSA not only reduces salary for �ral income tax pnrposes, it also ]owers the wages on which Social �.. � -`-�" � �l S�. .i. ' ' �_ -�..�n�': _ .v_�"_� _ . �'- . �`rt ...x� � • ��::: „ �� . . rt' "T,,�::' ' - >. . y ' '`�.Y-- _-"'r� - _ � � - �� _-��._' � 600 Part 7 Cafeteria Benefit Pians ` "^°j.� f.� . � ' - .'s.e, - y x"'; :�.v-_ --_=;: -,; :-. >- _ credits aze insuf6cient to purchase the desired benefits, additional amount can be conuibuted on a payroll-deduction basis. A variation of this approach is to have the core plan be an "average' plan for which the employee makes no concribution. 1'he employee ther may receive credits if certain benefits aze reduced. These credits can be used either to increase other benefits or, if the plan_aifows, to increue cash compensation. Modular Plans Another type of pian allows an employee a choice among severa; predesigned benefit packages. Typically, at least one of the packages �;�� involves no emgloyee cost; and if an employee selecu a more expensive package,-the employee contributes to the cost of the package. Some employers may atso inclvde a bare-bones benefit package which results in cash being paid to an employee who selects it. Under some plans using this "modulaz" approach, the predesigned packages may have significant differences, some being superior to others in certain respects, and inferior in others. Other glans using this approach have virtuatly idzntical packaees, with the major difference being in the options offered for medical expense coverage. For example, the plan of one large bank offers three traditionat insured plans, two HMOs, and a prefeaed provider organization. F7e�ble Spending Accounts Section 125 also allows employees to purchase certain benefia on a before-tax basis through the use of a Sexible spending (reimbursement; account. FSAs, which technicaliy aze cafeteria plans, can be used by themselves or incorporated into a more comprehensive cafeteria plan- They aze most common3y used alone by small employers who, primarily for cost reasons, are unwilling or unable to establish a broader plan. The cafeteria plans of most large emptoyers contain FSAs as an integral p�'t of the plan, An FSA alIows an employee to fund certain benefits on a before-tax basis through a satary reduction, which then is used to fund the cost of any quaiified benefiu that are included in the plan. However, they most commonly aze used for employee contributions to the employer's medical CouncSi File # Green Sheet # Presented By: Referred To: t z 3 4 s 6 � s 9 10 12 1J 14 15 16 17 48 19 20 21 22 23 24 25 26 27 28 Whereas, the City OF Committee: Date health and weifare benefii program services to emptoyees and retirees, and Whereas, the City wishes to establish a special fund and spending pian for the improved benefit program services, and Whereas, the City wants to compiy with all Fede21 regutatians govem7ng cafeteria plans, and �a Whereas, the City wishes to fund the building improvements necessary to transfer the workers' compensation function from the City Attomey's �ce to the Deparpnent of Technofogy and Management Services, Risk Mgmt Division, and Whereas, fhe Mayor, pursuant to Section t0.07.1 of the City Charter, recommends the foilowing changes to the 1997 Adopted Budget fat the City of Saint Paul: CURRENTBUDG£T CHANGES AMENDEDBUDGET ..ivu� .... .. .. ..,..,.... ,_. ..,:.:.�. : .. ...,. �•:. . . .- w �� a ... .._.. .. e, ,. , , � . �: GENERAI. FUND (Amentlment) FINANCING: Technobgy a�M Managemerit Serviees 001-0'13T0�6915 Riak Managemenq rePontl (OCA, Inc.) 001413703915 Risk Managament, re(wW (M[rtn Mutuaq Tohl Fund Change SPENDING: Technology and ManagemaM Serviees 001-01370-0111 • Risk Managemenk satarias 001-01370-0d39 -Risk ManagemaM, fringe henefib 001-01370A898 -Risk Managemen4 6uilding improvemenfs 4 52.218.G3 a 39,000.00 a 71,218A3 502,975.00 28,169.43 169,482.00 7,907A0 10 000 00 97 -/,3�3 ?9Rio 32,216.43 39,000.00 77,218.43 511,144.43 177,369.00 29 � � 35,142.00 45.142.00 30 TataiFund Chan9e 682,457.00 71,218.43 755,575.43 s� sz 3s Be it resolved, that the City Councit approves these actions and changes to the 1997 budgeL sa 35 Requested by Department of. � Technology and Mana ement Services l-/ V U\t�,V ��'-- �\ BY� +�AIJ-�Q-✓� ApRrovat Recommended by Budget Director. Adopted by Cauncii: Date �� 4 L �,qc`� -} 4doption Certified by Councii Secretary: 3 y' �� ' � t� �pproved by Mayor. Date _ � ( z � �_' y; �' Se'vifPaWBUtlpelOTC!( IPne N:WSEftSBVOGEIIOEPTS�FINnNCEt12lW13lORE5.W1(t SI01/9n , Technology & Mgmt ServicesfRisk Mgmt 9�-�39.3 ��10 May13 ,,ss� GREEN SHEE INRIAUDATE INRIAUDATE � Q��ApT�'�E'�T��aELTOR �CRYCOUNCIL IIJYB R FOR � Cm A�ORNEY O CS7Y CIERK -�� IOUTNG BUDGET OIREGfpq � FIN. d MfaL SEAVIC OIR �aoex ��p � g�- fn.ServiceslAcctg. - - - ---------_ TOTAL # OF SlGNATURE PAGES 1 (CLIP ALL LOCATIONS FOR SIGNATUR� ACTION AEOUESTED: Deposit funds from Minnesata Mutual and DCA, inc. to correspond with tfie Risk Management Division's spenrJ'ing plan. _ PUNNING COMMISStON _ CMLSEflVICE CAMMISSION _ CIB COMMITTEE _ STAFF .. ' `___�_ _ . . . _ DISTRILTCOURT SUPPOqTg WNiCN COUNCIL O&IECTNEI PEASONAI SE(iVICE CONTRACTS MUST ANSWER TNE fOLLOWING GUESTONS: 7. Has Mis persoMrcm pvpr wprgeE untler a rantract tor this depertment? _. - " YES 'NO • - . 2. Has this parson/firm ever heert a ag empWyee? . .�. - -� YES NO . .. _ - -- 3. Does this persoMrm possess a SW71 not nortnally ppssessed py eny curre�� it�, amplayee? �. YES NO . - _ _ _ .. _ ._ , . . ... - Eapleln ali yes answera on separats ahast �nd attaeh to yrsen sheat � � ��.vm.a rnw�em. uaut. VrrF�NiVNfTY(Wno. What WMn. Where.Why): --- To provide an additional benefit staff person in order to assure that the City cao impiemeM the new Health Insurence Portabilify - Act of i996, Federai law, effective June 1, 1997; provide backup services during the training and implementation phase of the Human Resource/Payrofl/Benefit Project; investigate additional employee optionai benefits the City may want to consider; and, ,,; research the cost of out-sourcing certain benefit administrative functions. Funds are necessary tor buifding improvements to '' accommodate this additionat staft person and four additional emptoyees trensferred by Councit action from the City Attorney's ' OHice to Risk Management (the Workers' Compensation function). , :. ... :-��. The City will maintain compiiance with ali Federal, State, and Socal laws and ail bargaining unit agreements in the administretion of the health and welfare program. Use of cafeteria pian funds within compGance of 26 USC 125. Funds wouid 6e available for Workers' Compensation transfer-related necessary building improvements. tdEC�t�Ett No�e NOV 06 1�97 f' s. � 1c �. acc �.. ti(! n►OV 10 �997 Disruption of service in the provision of benefit programs to employees and retirees would occur; participation of benefits staff in the Human Resource/Payroll/Benetit Project would end; consideration of improving both the leve! and cost of benefit administration would not happen; and, funds from some other source would have to be found to pay for the Workers' Compensation transfer related to buiiding improvements. 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'. ln� " i ^�`�T�✓^�� y ^y Ve�".'i+ �^� _ m � S .u. - � � �� k4 rn��4.. .� � �'.�.�'a.-y�..^�.. .��.� ' S. _ a. _ 4- Yi, _��- 6 S�+r.` :el ,� F%F".' _ _ i�`�`;.v"fiL'Y':. `•^c '_�v+� _ ._�"_" � _ �ROS�NB � � ERR�Yry=S:-� �__ _ LOOM ` �:s : —•>: �-.,. - ----------- E „ , � `�'�_ "�T� ��-�._.� ;� '—" � „�� - � _ � r3:n _,,.'$.-�� -"-,..,,::':`^_r.�,' � z : = .....m...�......c.e.-Sc�< - i, _...ww .i .:. - � " ry :. � '�. .. , -:`�'=...:�� .ra :.:;:- -�-i�3�3 � Chapter 29 Cafeteria Approaches tc genefrt Planniny gp� expense plan, medical expenses not covered by the employer's plan, and dependent care cxpenses. The amount of any salary reduction is crediced to an employee's reimbursement account, and benefics are paid from this account when an employee proRerly files for such reimbursement. The amavnt of the salary reduction must be specified on a benefit-by-benefit basis prior to the beginning of the plan year during an enrollment period. Once made, changes are allowed only under certain circumstances discussed later in this chapter. One issue faced by employers had been whether to limit benefit paymenu to the amount of a current account balance or allow an employee at any time during the year to receive benefics equal to the amount of his or her tota! annual salary teduction. For example, if an employee con- tributed $50 a month to an FSA to cover the cost of unreimbursed medical expenses, during the first month of the pIan there would be only 550 of � the 5600 annuai contribution in the account. If the emQloyee incurred g�9p ' of unreimbuned medical expenses during the monch, shouid he or she be , allowedareimbursementofS50orthefu115400?T'heobjectiontoallowing • a$400 reimbursement is that [he employer would lose 5350 if the employee teaninated employment before making any further contribvtions. Conse- quendy most plans limited aggregate benefits to the total contributions made at the time benefiu aze received. However, a recent IRS regulation changed the rules, and medical and dental expense FSAs now must allow an amount equal to the full annual contribution for these benefits to be taken < az benefits any[ime during the yeaz. Therefore the employee in the previons =� e�mP1e would be entided to a benefit payment of 540p afrer the first �� month. However, this regulation dces noc apply to other rypes of benefiu �; such as dependent caze under an FSA, and employers still have a choice ; of reimbursement poIicies for these. If the monies in an FSA are not used during the p1an year, they .aze :,. forfeited and belong to the employer. Some employers keep the forfeited ':. money and use it to offset the cost of administering the FSA program. ' xQwevez, aimost anything can be done with the money, except giving it � b�� individually to the persons who have forfeited it. Some employers `��e it to chariry, pt}�ers credit it on a pro rata basis to the accounts of a[I ' Participants in the FSA program for the foilowing yeaz or use it to reduce� �� benefit costs for all employees. �f An election to pazGcipate in an FSA not only reduces salary for �ral income tax pnrposes, it also ]owers the wages on which Social �.. � -`-�" � �l S�. .i. ' ' �_ -�..�n�': _ .v_�"_� _ . �'- . �`rt ...x� � • ��::: „ �� . . rt' "T,,�::' ' - >. . y ' '`�.Y-- _-"'r� - _ � � - �� _-��._' � 600 Part 7 Cafeteria Benefit Pians ` "^°j.� f.� . � ' - .'s.e, - y x"'; :�.v-_ --_=;: -,; :-. >- _ credits aze insuf6cient to purchase the desired benefits, additional amount can be conuibuted on a payroll-deduction basis. A variation of this approach is to have the core plan be an "average' plan for which the employee makes no concribution. 1'he employee ther may receive credits if certain benefits aze reduced. These credits can be used either to increase other benefits or, if the plan_aifows, to increue cash compensation. Modular Plans Another type of pian allows an employee a choice among severa; predesigned benefit packages. Typically, at least one of the packages �;�� involves no emgloyee cost; and if an employee selecu a more expensive package,-the employee contributes to the cost of the package. Some employers may atso inclvde a bare-bones benefit package which results in cash being paid to an employee who selects it. Under some plans using this "modulaz" approach, the predesigned packages may have significant differences, some being superior to others in certain respects, and inferior in others. Other glans using this approach have virtuatly idzntical packaees, with the major difference being in the options offered for medical expense coverage. For example, the plan of one large bank offers three traditionat insured plans, two HMOs, and a prefeaed provider organization. F7e�ble Spending Accounts Section 125 also allows employees to purchase certain benefia on a before-tax basis through the use of a Sexible spending (reimbursement; account. FSAs, which technicaliy aze cafeteria plans, can be used by themselves or incorporated into a more comprehensive cafeteria plan- They aze most common3y used alone by small employers who, primarily for cost reasons, are unwilling or unable to establish a broader plan. The cafeteria plans of most large emptoyers contain FSAs as an integral p�'t of the plan, An FSA alIows an employee to fund certain benefits on a before-tax basis through a satary reduction, which then is used to fund the cost of any quaiified benefiu that are included in the plan. However, they most commonly aze used for employee contributions to the employer's medical