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05-55 Resolution No. 05-55 RESOLUTION AUTHORIZING EXECUTION OF A BUSINESS ASSOCIATE AGREEMENT WITH FLEXIBLE BENEFIT SERVICE CORPORATION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that Olufemi Folarin, Acting City Manager, be and is hereby authorized and directed to execute a Business Associate Agreement on behalf of the City of Elgin with Flexible Benefit Service Corporation for the administration of the flexible spending plan program,a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock,Mayor Presented: February 23, 2005 Adopted: February 23, 2005 Vote: Yeas: 6 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk � r BUSINESS ASSOCIATE AGREEMENT This BUSINESS ASSOCIATE AGREEMENT (the "Agreement") is entered into this 3/1/2005, by and between City of Elgin, a municipal corporation (hereinafter the "Covered Entity"), and Flexible Benefit Service Corporation, an Illinois corporation (hereinafter the"Business Associate"). WHEREAS, the Business Associate has been retained by the Covered Entity to perform certain plan-related services as part of its Organized Health Care Arrangement (OHCA)on its behalf; and WHEREAS, in connection with the Business Associate's provision of services, the Covered Entity may disclose to the Business Associate information that is deemed to be "Protected Health Information" by the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 ("HIPAA"); and WHEREAS, Covered Entity and Business Associate intend to protect the privacy and provide for the security of Protected Health Information disclosed to Business Associate in compliance with HIPAA; and NOW THEREFORE, in consideration of the mutual promises and covenants contained herein, the sufficiency of which is mutually acknowledged, the parties hereto hereby enter into this Agreement. Definitions. For purposes of this Agreement: • "Business Associate" will include the Business Associate and all successors and assigns, affiliates, subsidiaries (as applicable), and related companies of the Business Associate. • "Designated Record Set" will have the same meaning given to the term "designated record set" in 45 C.F.R. 164.501. • "Individual" will have the same meaning as the term "individual" in 45 C.F.R. §164.501 and will include a person who qualifies as a personal representative in accordance with 45 C.F.R. §164.502(g). • "Privacy Rule" will mean the Standards for Privacy of Individually Identifiable Health Information at 45 C.F.R. Part 160 and Part 164, Subparts A and E. • "Protected Health Information" will have the same meaning as the term "protected health information" in 45 C.F.R. §164.501, limited to the information created or received by the Business Associate from or on behalf of the Covered Entity. • "Representative" will include the Business Associate's managing members (as applicable), trustees, general partners (as applicable) and financial and legal advisors. • "Required by Law" will have the same meaning as the term "required by law" in 45 C.F.R. § 164.501. • "Secretary' will mean the Secretary of the Department of Health and Human Services or his designee. 4- 1. Confidentiality. At all times, both during and after the termination of its relationship with the Covered Entity for any reason, the Business Associate and its Representatives will not use, disclose, or give others any of the Protected Health Information in any manner whatsoever, except as provided in paragraphs 2 and 3 of this Agreement, and will hold and maintain the Protected Health Information in confidence. The Business Associate will ensure that appropriate safeguards are in place to prevent the use or disclosure of the Protected Health Information other than as permitted by this Agreement. 2. Permitted Uses and Disclosures. (a) Except as otherwise limited in this Agreement, the Business Associate may use or disclose Protected Health Information on behalf of the Covered Entity for the following purposes: 1. To place a contract of insurance for health benefits for Covered Entity with a health plan that is subject to HIPAA's requirements; 2. To provide those services as outlined in the Plan Service Agreement already in place between the Covered Entity and the Business Associate; 3. For the proper management and administration of the Business Associate. (b)At the request of the Covered Entity, the Business Associate agrees to provide access to the Protected Health Information that it or its agents or subcontractors maintains in Designated Record Sets to the Individual to whom the Protected Health Information relates in accordance with 45 C.F.R. § 164.524. The Business Associate further agrees to document any disclosures of Protected Health Information and the information related to such disclosures to respond to an accounting of disclosures of Protected Health Information if requested by the Covered Entity, in accordance with 45 C.F.R. §164.528, and to provide such documentation to the Covered Entity as it may request from time to time. Furthermore, at the request of the Covered Entity, the Business Associate agrees to make amendments to Protected Health Information that it maintains in a Designated Record Set as directed by the Covered Entity and to incorporate any amendments to Protected Health Information in accordance with 45 C.F.R. § 164.526. Notwithstanding the foregoing, the Covered Entity will not request that the Business Associate use or disclose Protected Health Information in any manner that would not be permissible under the Privacy Rule if such disclosure or use were done by the Covered Entity itself. (c) The Business Associate may disclose Protected Health Information to its agents or subcontractors with a bona fide need to know such Protected Health Information, but only if, prior to such disclosure, such agents or subcontractors provide reasonable assurances that they will agree to the same restrictions and conditions that apply to the Business Associate with respect to such Protected Health Information. 3. Required Disclosures and Use. The Business Associate may disclose the Protected Health Information revealed to it by the Covered Entity if and to the extent that such disclosure is required by Law or court order. Further, the Business Associate agrees to make its internal practices, books, and records, including policies and procedures, relating to the use and disclosure of Protected Health Information received from, or created or received by the Business Associate on behalf of the Covered Entity, or to the Secretary, as requested by the Covered Entity or designated by the Secretary, for purposes of the Secretary determining the Covered Entity's compliance with the Privacy Rule. 4. Required Notice to the Business Associate. In accordance with 45 C.F.R. §164.520, and to the extent that such a limitation may affect the Business Associate's use or disclosure of Protective Health Information, the Covered Entity will notify the Business Associate of any limitation(s) in its notice of privacy practices of the Covered Entity, including, without limitation, any changes in, or revocation of, permission by an Individual to use or disclose Protected Health Information. Covered Entity will also notify the Business Associate of any restriction to the use or disclosure of Protected Health Information that Covered Entity has agreed to in accordance with 45 C.F.R. § 164.522, to the extent that such restriction may affect the Business Associate's use or disclosure of Protected Health Information. 5. Required Notice to the Covered Entity. The Business Associate will report to the Covered Entity any use or disclosure of Protected Health Information otherwise than as provided by this Agreement within ten days of becoming aware of such use or disclosure. 6. Disclosure to Employees of the Covered Entity or Plan Sponsor. (a) The Covered Entity acknowledges and agrees that the Business Associate shall only disclose PHI in its possession to the employees who are identified in the Plan documents (Designated Persons) in accordance with 45 C.F.R. § 164.504(f), and that such disclosures are solely for purposes of carrying out plan administration functions that the Plan Sponsor performs for the Plan. (b) Covered Entity agrees to timely notify Business Associate in writing of any changes to the names or positions of employees listed in subsection (a) as Designated Persons. Business Associate shall have no duty to inquire whether the list of Designated Persons is accurate. (c) Covered Entity/Plan Sponsor shall indemnify and hold harmless Business Associate (and its employees) for any and all liability Business Associate may incur as a result of any improper use or disclosure of PHI by the Covered Entity, Plan Sponsor or a Designated Person(s). Term/Termination. 7.1 Term. This Agreement shall terminate as provided in Section 7.2 or upon thirty(30) days written notice by the Covered Entity or the Business Associate. 7.2 Termination for Cause. Upon Covered Entity's knowledge of a material breach of this Agreement by Business Associate, the Covered Entity shall either: (1) Provide an opportunity for Business Associate to cure the breach or end the violation and terminate this Agreement if Business Associate does not cure the breach or end the violation within the time specified by the Covered Entity; or (2) Immediately terminate this Agreement if Business Associate has breached a material term of this Agreement and cure is not possible; or (3) If neither termination nor cure is feasible, Covered Entity shall report the violation to the Secretary. 7.3 Effect of Termination. (1) Upon termination of this Agreement, for any reason, Business Associate shall return or destroy all Protected Health Information received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the Protected Health Information. (2) In the event that Business Associate determines, in its sole discretion, that returning or destroying the Protected Health information is infeasible, Business Associate shall provide to Covered Entity notification of the conditions that make return or destruction infeasible. In the event that Business Associate determines that return or destruction of the Protected Health Information is infeasible, Business Associate will continue to extend the protections of this Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information to those purposes that make the return or destruction infeasible, for so long as the Business Associate maintains such Protected Health Information. 8. No Third Party Beneficiaries. Nothing express or implied in this Agreement is intended to confer, nor shall anything herein confer, upon any person other than Covered Entity, Business Associate and their respective successors or assigns, any rights, remedies or obligations whatsoever. 9. Successors and Assigns. This Agreement and each party's obligations hereunder will be binding on the representatives, assigns, and successors of such party and will inure to the benefit of the assigns and successors of such party; provided, however, that the rights and obligations of the Business Associate hereunder are not assignable. 10. Notices. All notices, requests, consents and other communications hereunder will be in writing, will be addressed to the receiving party's address set forth below or to such other address as a party may designate by notice hereunder, and will be either(i) delivered by hand, (ii) made by facsimile transmission, (iii) sent by overnight courier, or (iv) sent by registered or certified mail, return receipt requested, postage prepaid. If to the Covered Entity: Facsimile: If to the Business Associate: Flexible Benefit Service Corporation 10275 W. Higgins Road, Suite 500 Rosemont, IL 60018 Fax: 847-699-6906 11. Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement will affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement. 12. Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto and any such amendment will comply with the requirements of the Privacy Rule and the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191. 13. Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement will to any extent be declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and each portion and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law; and (ii) if any provision, or part thereof, is held to be unenforceable because of the duration of such provision, the Covered Entity and the Business Associate agree that the court making such determination will have the power to reduce the duration of such provision, and/or to delete specific words and phrases, and in its reduced form such prevision will then be enforceable and will be enforced. 14. Interpretation. The parties hereto acknowledge and agree that both (i) the rule of construction to the effect that any ambiguities are resolved against the drafting party and (ii) the terms and provisions of this Agreement, will be construed fairly as to all parties hereto and not in favor of or against a party, regardless of which party was generally responsible for the preparation of this Agreement. 15. Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and will in no way modify, or affect the meaning or construction of any of the terms or provisions hereof. 16. No Waiver of Rights Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, will operate as a waiver of any such right, power or remedy of the party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, will preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto will not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Agreement will entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent will be deemed to be or will constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent will be effective only in the specific instance and for the purpose for which it was given, and will not constitute a continuing waiver or consent. 17. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Illinois. Venue for the resolution of any disputes or the enforcement of any rights arising out of or in connection with this Agreement shall be in the Circuit Court of Kane County, Illinois. 18. Counterparts. This Agreement may be signed in counterparts, which together will constitute one agreement. 19. Incorporated Documents. The "Adoption Agreement" and "Plan Service Agreement" adopted by the covered entity and attached hereto as Attachments "A" and "B" are incorporated herein and made a part hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives or officers, effective as of the date first listed above in the preamble to this Agreement. COVERED ENTITY: City o Elgi ' BUSINESS ASSOCIATE: xl Benef ry e C poration le e a ATTACHMENT A City of Elgin Section 125 Cafeteria Plan ADOPTION AGREEMENT Effective Date: 3/1/2005 Item 1: Adoption The Employer hereby establishes a Qualified "Cafeteria Plan" as set forth pursuant to Section 125 of the Internal Revenue Code. The Benefit Package Options listed in Item VII below have been incorporated into this Plan by reference. Nothing in this Adoption Agreement shall be intended to override the terms of the Plan Document to which this Adoption Agreement is attached. Item II: Employer Organization Name of Organization: City of Elgin Federal Employer ID Number: 36-6005862 Date Incorporated: 1854 Mailing Address: 150 Dexter Court City, State, Zip: Elgin, IL 60120 Street Address: 150 Dexter Court Street Zip: 60120 Form of Organization: Government Organized in the state of: IL Item III: Plan Elections Plan Information Plan No.: 501 Plan Name: City of Elgin Flex 125 Plan Original Effective Date: 03/01/2005 Plan Year Runs*: 03/01 - 02/28 Plan Restated and Amended: *This Plan is designed to run on a 12-month plan year period as stated above.A Short Plan Year may occur when the Plan is first established, when the plan year period changes,or at the termination of a Plan. Plan Administrator: City of Elgin Plan Service Provider: Flexible Benefit Service Corporation Street Address: 10275 W. Higgins Road, Suite 500 City, State, Zip: Rosemont, IL 60018 Contact: Joe Mancuso Phone: (847) 699-6900 Page I City of Elgin 03/01/2005,V.4.8.4 Section 125 Cafeteria Plan Adoption Agreement Item IV: Eligibility Requirements (a) Except as provided in (b)below,the Classification of eligible employees consists of all employees. (b) Employees excluded from this classification group are those individual employees who fall into one or more of the following categories below: Same as underlying health policy Service Period Requirement Incorporated by reference from Underlying benefit Policies. Item V - Benefit Package Options The following Benefit Package Options are offered under this Plan: 5.1 Core Health Benefits. The terms, conditions, and limitations of the Core Health Benefits offered will be as set forth in and controlled by the Group/Individual Medical Insurance Policy or Policies. 5.7 Health Flexible Spending Account. The terms, conditions, and limitations will be as set forth in and controlled by the Plan Document. Each year each participant may elect in writing on a form filed with the plan administrator on or before the date he first becomes eligible to participate 5.8 Dependent Care Assistance Plans. The terms, conditions, and limitations will be as set forth in and controlled by the Plan Document. Each year each participant may elect in writing on a form filed with the plan administrator on or before the date he first becomes eligible to participate Item VI - Flexible Spending Account Elections The Closing Period is the period of time that begins after the Plan Year ends during which the employee can submit claims for payment of Qualified Expenses incurred during the Plan Year. This Closing Period begins at the end of the Plan year and terminates 60 days after the end of the plan year. The Claims Submission Grace Period is the period of time after an employee terminates employment (or loses eligibility to participate in the Plan) during which the employee can submit claims for expenses incurred while the employee remained a participant. The Claim Submission Grace Period begins on the employee's termination and ends 60 days after the end of the plan year. Health FSA (a) The maximum annual reimbursement amount an Employee may elect for any Plan Year is $2000.00. (b) The maximum annual reimbursement amount that a Participant may receive during the year is the annual reimbursement amount elected by the Employee on the Salary Reduction Agreement for Health FSA coverage, not to exceed the amount set forth in(a) above. (c) Minimum Contribution for this Benefit per Plan Year per Employee is $0.00. (d) In order to receive reimbursement under the Health FSA, the claim or claims must equal or exceed the Minimum Check Amount. If a claim or claims submitted by the Participant do not equal or exceed this amount, the claim or claims will be held until the accumulated claims equal or exceed the Minimum Check Amount, except that claims submitted for reimbursement during the last month of Page 2 City of Elgin 03/01/2005,V.4.8.4 Section 125 Cafeteria Plan Adoption Agreement the Plan Year, the Closing Period, or the Claims Submission Grace Period, whichever is applicable, will not be subject to the Minimum Check Amount. The Minimum Check Amount under this Plan is hereby set as $0.00. Dependent Care Assistance Plan (a) The maximum annual reimbursement amount a Participant may elect under the Dependent Care Assistance Plan for any Plan Year is the lesser of the maximum established by the Plan described in (b)below or the statutory maximum specified in Code Section 129 (as described in Appendix A of the Plan). (b) The maximum annual reimbursement amount established by the Dependent Care Assistance Plan is as follows: $5000.00 for married filing jointly or single and $2500.00 for married filing separately. (c) The maximum annual reimbursement that a Participant may receive during the year is the annual reimbursement amount elected by the Participant on the Salary Reduction Agreement, not to exceed the amount in(a) above. (d) Minimum Contribution for the Benefit per Plan Year per Employee is $0.00. (e) In order to receive reimbursement under the Dependent Care Assistance Plan, the claim or claims must equal or exceed the Minimum Check Amount. If a claim or claims submitted by the Participant do not equal or exceed this amount, the claim or claims will be held until the accumulated claims equal or exceed the Minimum Check Amount, except that claims submitted for reimbursement during the last month of the Plan Year or during the Closing Period or Claims Submission Grace Period, whichever is applicable, will not be subject to the Minimum Check Amount. The Minimum Check Amount under this Plan is hereby set as $0.00 Item VII: Plan Entry Date The Plan Entry Date is the date when an employee who has satisfied the Eligibility Requirements may commence participation in the Plan. The Plan Entry Date is the later of the date the Employee files a Salary Reduction Agreement or Date requirements are met. Item VIII: Contacts and Responsibilities Benefits Coordinator Name: Jacqueline Stashwick Title: HR/Benefits Coordinator Phone: (847) 931-5605 Company Name: City of Elgin Street Address: 150 Dexter Court City, State,Zip: Elgin, IL 60120 Acceptance of Legal Process Name: Loni Mecum Title: City Clerk Phone: (847) 931-5660 Company Name: City of Elgin Street Address: 150 Dexter Court City, State,Zip: Elgin, IL 60120 Page 3 City of Elgin 03/01/2005,V.4.8.4 Section 125 Cafeteria Plan Adoption Agreement Item IX - Incorporation by Reference The actual terms and the conditions of the separate benefits offered under this Plan are contained in separate, written documents governing each respective benefit, and will govern in the event of a conflict between the individual plan document and the Employer's Cafeteria Plan adopted through this Agreement as to substantive content. To that end, each such separate document, as amended or subsequently replaced, is hereby incorporated by reference as if fully recited herein. Signature: Date: Name: Title: Executed at: City of Elgin 150 Dexter Court Elgin, IL 60120 Page 4 City of Elgin 03/01/2005,V.4.8.4 i3 ATTACHMENT B Defined Contribution PLAN SERVICE AGREEMENT CAFETERIA PLAN MANAGEMENT FOR THE CITY OF ELGIN ADOPTED BY THE CITY OF ELGIN EFFECTIvE 0310112005 DEFINED CONTRIBUTION PLAN SERVICE AGREEMENT CONSULTING, ENROLLMENT, AND PLAN SERVICES AGREEMENT This agreement specifies the services to be provided to the City of Elgin, a client of Global Benefits Inc. DEFINITIONS FSA: Flexible Spending Arrangement. FSA is a generic term that refers to either a Section 125 Cafeteria Plan. ADMINISTRATOR Under the agreement, City of Elgin will function as the Plan Sponsor and Flexible Benefit Service Corporation as the Plan Service Provider Firm, who will function as a subcontractor for consulting, enrollment, and administrative Plan services. CONSULTING SERVICES TO BE PROVIDED BY FLEXIBLE BENEFIT SERVICE CORPORATION Flexible Benefit Service Corporation will assist City of Elgin in Plan analysis and design, both initially and for any revisions to existing benefits. The service and assistance includes cost estimates of initial Plan; cost projections of any proposed Plan revisions; and advice on preparing summary Plan descriptions. Flexible Benefit Service Corporation will also perform the following activities: • Design the Plan Document and Summary Plan Description. (City of Elgin and its legal counsel will review this document.) • Provide Plan Adoption Agreement and Plan Information Summary (A sample Resolution may be provided to the employer,upon request) • Provide Administration Manual • Provide Employee Enrollment Materials • Payroll Stuffers, Announcement Letter, Salary Reduction Agreements Administrative Service Agreement Myflexinfo.com...Status at your fingertips FBSC offers an online resource called myflexinfo.com, which provides a user, regardless of their role(employee, human resources administrator, etc.), a centrist view of information about their company's defined contribution plan. Whether the company has established Flex125TM Cafeteria Plan Management,FlexHRATM Health Reimbursement Accounts, or FlexT RATM Transit Reimbursement Accounts, myflexinfo.com serves as a channel of communication through which everyone can be kept in the loop, without the hassle of making phone calls and leaving voicemails. Through myflexinfo.com, for example, employees can learn how their benefit plans work, check account history and current balances, download forms, and much more; while a Human Resources Administrator can view COBRA status, aggregate status reports, employee payment history, etc. ENROLLMENT SERVICES TO BE PROVIDED BY FLEXIBLE BENEFIT SERVICE CORPORATION Flexible Benefit Service Corporation will provide the following enrollment services: • Present employee educational group meetings. • Meet with each employee, as needed, to discuss the employee's personal benefit coverage needs. • Review salary reduction agreements with each employee as requested. • Provide periodic re-enrollment services as requested. ADMINISTRATIVE SERVICES TO BE PROVIDED BY FLEXIBLE BENEFIT SERVICE CORPORATION Flexible Benefit Service Corporation will provide the following administrative services: • Open individual benefit accounts for Plan administration using the enrollment forms and/or payroll deduction register provided by the Employer. • Prepare reports of detail and summary enrollment results for payroll setup of employee elections: Employee Deductions Report, Employee Contributions Report, and Employee Contribution Spreadsheet. • Prepare employee confirmation letters to verify elections where required. • Process Changes of Status Elections into Administration Records and otherwise keep on-going records of activity affecting each Employee's Elections. • Process and send Pay Cycle Contribution Billing Reports to Employer confirming the deductions that should be taken for premiums, flexible spending accounts, and personal policy plans. • Provide initial administrative form originals for duplication as needed: • Reimbursement Claim Forms • Participant instructions for filing claim forms • Election Enrollment, Termination and Change of Election Forms PAGE 2 05/01/2004 Administrative Service Agreement • Re-Enrollment Forms for following year enrollment if requested. • Provide periodic status and history reports • Account Balance totals on each reimbursement checks • Account Balances Report on the Employee Account Status Letter on a monthly basis during the final quarter of the Plan year. • Account History Report on request • Check History Report on request • Claim History Report on request • On a Twice Monthly, provide: • Contribution Billing Report to be used to reconcile with payroll deduction amounts • Reimbursement checks and/or direct deposit to employees upon receipt of expense receipts and approved claim vouchers. • Checks and Check Register showing checks written each cycle to be distributed by employer. • On a Monthly basis, provide Non-discrimination tests results if needed and other reports as needed: • Monthly Check Register showing the checks issued for the month. • Cash Status Report showing summary transactions of cash activity. • Request For Funds Report (if required) showing those employees that have drawn out more than contributed to date and any participants that have had previous requests. • Employee Account Balances showing the participants' account balances. • On a Annual basis,provide: • Employee Account Balance Report • Change Of Status Report • Non-discrimination Test • W-2 Reporting Amounts for Dependent Care • Plan forfeitures and Account Close-out • Plan Renewal Election Forms • Claims Processing for Reimbursement Accounts • FSA Medical Claims: A claim(form provided) from the participant stating that the amount claimed has not been, nor will be reimbursed under any other health Plan or otherwise along with written proof of the claim from a third party documenting the date incurred, nature and the cost of the claim. For Medical FSAs, the full annual election less any previous disbursements is available at all times during the Plan year and run-out period. • FSA Dependent Care Claims. A claim (form provided) showing all required documentation showing by dependent cared for the name, address, and taxpayer ID with the dates of service. Claims elections will be monitored to conform with statutory maximums. Reimbursements are limited to the amount in the FSA at the time of request. Unpaid portions of the claim will be automatically paid during the check processing cycle after the next contribution has been posted the account. • Balance Inquiry Services • Plan participants may call the Plan Service Provider Firm, but it is recommended that they first contact the Employer's Benefit Coordinator. • Internet Inquiry, an additional service available to City of Elgin, is available to the Plan Participants that have one or more of the reimbursement accounts. The participant has access to Account Balances, Check History, and Claim History for the current Plan year. ON A SPECIAL REQUEST BASIS,PROVIDE ASSISTANCE TO EMPLOYER PLAN SPONSOR AS REQUESTED AT THE BILLING RATE SPECIFIED IN THE SERVICES AGREEMENT, REGARDING AN IRS AUDIT OF THE CAFETERIA PLAN YEAR(S) PAGE 3 05/01/2004 Administrative Service Agreement RESPONSIBILITIES OF PLAN SPONSOR City of Elgin is the Plan Sponsor and the Plan Administrator that is ultimately responsible for the Plan including the above listed duties delegated to Flexible Benefit Service Corporation. All decisions regarding Plan Administration are the Plan Administrator's responsibility whereas Flexible Benefit Service Corporation will assist the Administrator but not act as the Administrator. City of Elgin will provide support, information,reports, and data necessary to propose, administer, report,test, and otherwise administer the Cafeteria Plan to Flexible Benefit Service Corporation so Flexible Benefit Service Corporation can assist with the administration of the Plan. More specifically these include but are not limited to: • Secure legal review of the Plan Documents from its legal counsel or otherwise review and execute the documents in a timely manner, and forward a signed copy back to Flexible Benefit Service Corporation • Report participant Election additions, terminations, and changes to Flexible Benefit Service Corporation each pay cycle. • Ensure that the DataPath125 database accurately reflects the activity recorded in the employer's payroll by reconciling the payroll deduction amounts paid with pre-tax dollars through DataPath125 to the Administrative Contribution Billing Reports provided for that purpose each pay cycle by Flexible Benefit Service Corporation • Sign reimbursement checks (using an authorized signature facsimile) depending upon banking arrangements. • Distribute checks to the Plan Administrator. • Distribute Summary Plan Descriptions and various other reports to employees. • Upon notice, take any action required if the Plan(s)warrants Administrator's authority. • Provide management support in planning enrollment,meeting facilities, and scheduling. • Provide document storage for Administrative Files and Records for up to seven years. PAYMENT FEES AND TERMS On the 15' of each month, Flexible Benefit Service Corporation will submit a statement showing the amount of fees due for the following month to Global Benefits, Inc. Global Benefits, Inc. will pay Flexible Benefit Service Corporation that amount within 15 days of receipt of the statement. Flexible Benefit Service Corporation has the right to change the fee schedule by giving at least 60 days notice to Global Benefits Inc. REPORTS AND DATA All reports and data remain the property of City of Elgin. On request, Flexible Benefit Service Corporation will provide City of Elgin. all data in the electronic or printed format used by Flexible Benefit Service Corporation. PAGE 4 05/01/2004 • Administrative Service Agreement TERMS OF THIS AGREEMENT This agreement will be effective from the date the parties execute this agreement until it is terminated. If City of Elgin or Global Benefits Inc. terminates this agreement during the Plan year, the fee for the rest of the Plan year becomes due and payable as of the termination date. If Flexible Benefit Service Corporation wishes to terminate this agreement during the Plan year, Flexible Benefit Service Corporation must give written notice and must continue services until Global Benefits Inc. has secured suitable replacement of such service or until Global Benefits Inc. releases Flexible Benefit Service Corporation or until the end of the current Plan year, whichever occurs first. CLIENT FLEXIBLE BENEFIT SERVICE CORP. City of Elgin By: By: Title: �,� s Title: P S Date: %L -tLa— O C Date: PAGE 5 05/01/2004 HIPAA PLAN DOCUMENT AMENDMENT AMENDMENT TO City of Elgin Flex 125 Plan PLAN DOCUMENT—THE USE AND DISCLOSURE OF PROTECTED HEALTH INFORMATION A. Use and Disclosure of Protected Health Information (PHI) The City of Elgin Group Health Plan will use protected health information (PHI) to the extent of and in accordance with the uses and disclosures permitted by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Specifically, the Plan will use and disclose PHI for purposes related to health care treatment, payment for health care and health care operations as defined in the Privacy Notice distributed to Plan Participants. The Plan will disclose PHI to the Plan Sponsor only upon receipt of a certification from the Plan Sponsor that the Plan documents have been amended to incorporate the provisions in Section B below. B. With Respect to PHI, the Plan Sponsor Agrees to Certain conditions. The Plan sponsor agrees to: ♦ Not use or disclose PHI other than as permitted or required by the Plan document or as required by law; ♦ Ensure that any agents, including a subcontractor, to whom the Plan sponsor provides PHI received from the Plan agree to the same restrictions and conditions that apply to the Plan Sponsor with respect to such PHI; ♦ Not to use or disclose PHI for employment-related actions and decisions unless authorized by an individual; ♦ Not use or disclose PHI in connection with any other benefit or employee benefit plan of the Plan Sponsor unless authorized by an individual; ♦ Report to the Plan any PHI use or disclosures provided of which it becomes aware; Make PHI available to an individual in accordance with HIPAA's access requirements; ♦ Make PHI available for amendment and incorporate any amendments to PHI in accordance with HIPAA; ♦ Make available the information required to provide an accounting of disclosures; Make internal practices, books and records relating to the use and disclosure of PHI received from Plan available to the HHS Secretary for the purposes of determining the Plan's compliance with HIPAA; and ♦ If feasible, return or destroy all PHI received from the Plan that the Plan Sponsor still maintains in any form, and retain no copies of such PHI when no longer needed for the purpose for which disclosure was made (or if return or 1 destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction infeasible). C. Adequate Separation Between the Plan and the Plan Sponsor Must Be Maintained In accordance with HIPAA, only the following may be given access to PHI: [List personnel with PHI access for benefits administration purposes] The persons described herein may only use and disclose PHI for Plan administration functions that the Plan Sponsor performs for the Plan. If the persons described herein do not comply with the Plan document, the Plan Sponsor shall provide a mechanism for resolving issues of noncompliance, including disciplinary sanctions. [Signatures on the following page.] 2 Signed on behalf of the City of Elgin Group Health Plan By: .�. Title: Date: a .a$'•pS� 3 Y %r City Of Elgin Agenda Item No. c�- ) February 18, 2005 TO: Mayor and Members of the City Council FROM: Olufemi Folarin, Acting City Manager Gail Cohen, Human Resources & Purc sing Director SUBJECT: Adoption of Flexible Spending Plan PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information to formally adopt the flexible spending plan program. RECOMMENDATION It is recommended that the City Council formally adopt the flexible spending plan program. BACKGROUND At its January 12 meeting, Council was informed about the flexible spending plan starting March 1, administered by Flexible Benefit Service Corporation, which will permit employees to use pre-tax income to pay for their premium contributions as well as other non-covered medical expenses and childcare. At its February 9 meeting, Council approved an ordinance that allows the City to report flexible benefit spending funds as compensation to IMRF. At this meeting, Council is being asked to formally adopt the plan, as required by the Internal Revenue Service. Attached hereto are the Adoption Agreement, the Business Service Agreement between the City and Flexible Benefit Service Corporation and the Plan Service Agreement between the City and Flexible Benefit Service Corporation. GROUPS/INTERESTED PERSONS CONTACTED The City is required to offer this program to police officers through the contract negotiated with the Policemen's Benevolent and Protective Association. The program has been offered to all employees with the majority indicating a wish to participate. FIAIANCIAL IMPACT There is no financial impact on the City by formally adopting the flexible spending plan. f Formal Adoption of the Flexible Spending Plan February 18, 2005 Page 2 L GALIMPACT V\V/��/The Legal Department has reviewed the attached agreements and adoption document. ALTERNATIVES 1. Formally adopt the flexible spending plan. 2. There are no other viable alternatives. Respectfully submitted for Council consideration. GAC Attachment Resolution No. 05- RESOLUTION TO INCLUDE COMPENSATION PAID UNDER AN INTERNAL REVENUE CODE SECTION 125 PLAN AS IMRF EARNINGS WHEREAS,standard member earnings reportable to the Illinois Municipal Retirement Fund do not include compensation paid under an Internal Revenue Code section 125 plan or compensation directed into a premium conversion plan or flexible spending account; and WHEREAS, an IMRF participating unit of government may elect to include in IMRF earnings compensation paid under an I.R.C. section 125 plan or compensation directed into a premium conversion plan or flexible spending account by action of the governing body; and WHEREAS,the City Council of the City of Elgin is a authorized to include section 125 plan and premium conversion and flexible spending account compensation as earnings reportable to IMRF and it is desirable that it do so . NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Elgin does hereby elect to include as earnings reportable to IMRF compensation paid under an I.R.C. section 125 plan and/or compensation directed into a premium conversion plan or flexible spending account effective March 1, 2005. BE IT FURTHER RESOLVED that the City Clerk is authorized and directed to file a duly certified copy of this resolution with the Illinois Municipal Retirement Fund. Ed Schock, Mayor Presented: Adopted: Vote: Yeas Nays: Recorded: Attest: Dolonna Mecum, City Clerk FALegal Dept\Resolutions\IMRF-Compensation Plan-GC.doc