07-36 Resolution No. 07-36
RESOLUTION
APPROVING AN AMENDMENT TO THE FLEXIBLE SPENDING PLAN
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,ILLINOIS,that
the"City of Elgin Section 125 Cafeteria Plan Adoption Agreement,Effective Date: 3/1/2005"(the
"Section 125 Cafeteria Plan"), be and is hereby amended to provide that subparagraph (a) of the
"Health FSA" section within"Item VI—Flexible Spending Account Elections"of the Section 125
Cafeteria Plan read as follows: "The maximum annual reimbursement amount an Employee may
elect for any Plan Year is $3000.00."
s/ Ed Schock
Ed Schock, Mayor
Presented: February 14, 2007
Adopted: February 14, 2007
Vote: Yeas: 7 Nays: 0
Attest:
s/Dolonna Mecum
Dolonna Mecum, City Clerk
s/Jennifer Quinton
Jennifer Quinton, Deputy City Clerk
OFE(C
City of Elgin Agenda Item No.
February 9, 2007
■
TO: Mayor and Members of the City Council '� w
l!; ~table
FROM: Olufemi Folarin, Acting City Manager
Gail Cohen, Human Resources &Purchasing Director
SUBJECT: Amendment to Flexible Spending Plan
PURPOSE
The purpose of this memorandum is to provide the Mayor and members of the City Council with
information to consider an amendment to the City's flexible spending plan program.
RECOMMENDATION
It is recommended that the City Council amend the flexible spending plan program to increase
rthe amount of pre-tax income employees may use for health expenses from $2,000 to $3,000.
BACKGROUND
In 2005, Council approved a flexible spending plan, administered by Flexible Benefit Service
Corporation, which permitted employees to use up to $2,000 per year in pre-tax income to pay
for their premium contributions as well as other non-covered medical expenses. The City is
permitted to set the cap for this program. Since the program was new to employees and the City
bears the risk of fronting all money to be contributed over the year by employees, the program
began with a $2,000 annual cap. Employees have requested that the annual cap be increased.
Therefore, we are recommending that the annual amount that employees may use as pre-tax
income to pay for health related expenses be set at $3,000 for the plan year starting March 1,
2007.
GROUPS/INTERESTED PERSONS CONTACTED
None.
/J/JJNANCIAL IMPACT
The Flexible Spending Plan will save the City's portion of the contribution to Social Security for
each employee who participates in the Plan. At this point, since open enrollment is in process,
rib' this amount cannot be calculated. About 70 employees currently contribute $2,000 to the
r
Amendment of the Flexible Spending Plan
February 9, 2007
Page 2
flexible spending plan and it's expected that a majority of those employees will increase their
contributions to $3,000 in 2007. There are no additional charges by Flexible Benefit Service
Corporation to administer the increased contributions.
\ ' 1"7None.LEGA IMPACT
ALTERNATIVES
1. The Council may choose to amend the flexible spending plan.
2. The Council may choose to leave the plan as is.
Respectfully submitted for Council consideration.
GAC
Attachment
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