08-117 Resolution No. 08-117
RESOLUTION
APPROVING AN AMENDMENT TO THE HEALTH REIMBURSEMENT AGREEMENT
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS,that
the City of Elgin desires to amend the City of Elgin FIexHRA Plan definition of Section 5.04 in the
Adoption Agreement—Eligible Spend-Down Expenses,effective March 1,2008,to clarify eligible
expenses for Retirees and Terminated Employees, as set forth in the attached Amendment; and
BE IT FURTHER RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, hereby adopts the attached Amendment to the City of Elgin Health Reimbursement
Arrangement effective as of March 1, 2008 and authorizes Olufemi Folarin, City Manager, to
execute the amendment, a copy of which is attached hereto and made a part hereof by reference.
s/Ed Schock
Ed Schock, Mayor
Presented: May 14, 2008
Adopted: May 14, 2008
Omnibus Vote: Yeas: 6 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
fk
AMENDMENT TO THE
CITY OF ELGIN
Health Reimbursement Arrangement
This Amendment to the City of Elgin HRA Plan is adopted by CITY OF ELGIN (the
"Employer"),effective as of the date set forth herein.
WHEREAS, the Employer desires to amend Plan's definition of Section 5.04 in the
Adoption Agreement-Eligible Spend-Down Expenses;
NOW, THEREFORE, effective March 1, 2008, the definition Section 5.04 in the
Adoption Agreement in the Plan is replaced with the following definition:
"Eligible Spend-Down Expenses"are any medical care expenses incurred by you or your
Eligible Dependents that would otherwise qualify for a deduction under Code § 213
(irrespective of the income limitations set forth in Code §213), and have not been or will
not be reimbursed by any other source. Notwithstanding this, qualified long term care
services, COBRA payments and insurance premiums can be eligible for reimbursement
for retired and terminated employees. For purposes of this Plan, an expense is "incurred"
when the Participant or beneficiary is furnished the medical care or services giving rise to
the claimed expense.
IN WITNESS WHEREOF, and as evidence of the adoption of the amendments set forth herein,
the undersigned officer of City of Elgin has executed this Amendment to the Plan, this 14th day
of may ,2008.
City , , .in
By: \ O may_
01u -mi Fola in
Title: Cit Mana• -
t,
April 18, 2008
Ok V
TO: Mayor and Members of the City Council
tail r.ul� S/dbh
FROM: Olufemi Folarin, City Manager C;,,) co1cr<<f„<ia
Gail Cohen, Human Resources and Purchasing Director
SUBJECT: Amendment to Health Reimbursement Account
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 Flex Health Reimbursement Account Plan
which clarifies the ability to use such funds to pay post-termination health premiums.
RECOMMENDATION
It is recommended that the City Council approve an amendment to the City's Flex Health
Reimbursement Account Plan which clarifies the ability to use such funds to pay post-
termination health premiums.
BACKGROUND
In March 2005, the City adopted a Health Reimbursement Account program through Flexible
Benefits Corporation, which provides payments to full time and permanent part time employees
who have "opted out" of the City's health insurance program because they have an alternative
source of insurance. The funds can be used for eligible medical expenses, including payment of
post-termination health insurance premiums, and are considered non-taxable for income tax
purposes (similar in nature to employer paid health insurance premiums). Flexible Benefits
Corporation has recommended that language be added to the Plan document clarifying this
benefit.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
None
FINANCIAL IMPACT
None
Amendment to Health Reimbursement Account
April 18, 2008
Page 2
LEGAL IMPACT
None
ALTERNATIVES
1. The City Council may choose to adopt the amendment to the Health Reimbursement
Account Plan document.
2. The City Council may choose not to adopt the amendment to the Health Reimbursement
Account Plan document.
Respectfully submitted for Council consideration.
GAC