RES 13-77 i
City of
Wver
Resolution - 77
Resolution of the City of Elk River to Amend and Restate the City's
Flexible Benefits Plan
WHEREAS, the City of Elk River previously adopted the City of Elk River Flexible
Benefits Plan C'Plan") on June 6, 1988, to permit eligible Employees to elect to receive a
portion of their compensation as regular taxable income or as nontaxable payment of the
Employee's premiums for Employer-sponsored insurance and for reimbursement of the
Employee's Health Care Expenses and Dependent Care Expenses;and
S, the Plan has continued in force at all tithes since its effective date; and
WHEREAS, the most recent revision and restatement of the Plan was January 1, 2013;
and
WHEREAS, die City of Elk River desires to amend and restate the Plan to remove the
Grace Period provision;and
WH E REAS, the City=of Elk River desires to amend and restate the Plan to incorporate a
Carry-over provision.
THEREFORE, BE IT RESOLVED by tine City Council of the City of Ells
River, Minnesota, as follows: The City of Elk River Flexible Benefits Plan be amended and
restated effective January 1, 2014.
Passed and adopted this 16"' day of December 2013.
1;,V7�
J J. ietz, .or
f
ATTEST;
Tina Allard, City Clerk
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pa w E R E U AY
NATUREJ
i
AMNDMNTTO
CITY OF ELK RIVER FLEXIBLE BENEFITS PLAN
BY THIS AMENDMENT,the City of Elk River Flexible Benefits Plan (herein referred to as the"Plan's is
hereby amended as follows:
1. AUTHORITY AND SCOPE. This Amendment is being made pursuant to (a) the Plan sponsor's general
authority to amend and modify the Plan, and (2) IRS Notice 2013-71, which authorizes limited carryovers
under certain health flexible spending accounts that are part of a Section 125 cafeteria plan.
2. WORDS AND PHRASES. Unless specifically defined herein, the words and phrases used in this
Amendment are intended to have their ordinary meaning and are not necessarily i ntended to have the
same meaning as the same defined terms used in the Plan.
3. EFFECTIVE DATE. This Amendment first applies with respect to the plan year beginning on or after
January 1, 2014.
4. LIMITED CARRYOVER UNDER HEALTH FSA. The health flexible spending account(s) (the"health
FSA(s)'� that is part of the Plan is hereby amended to provide a limited carryover of account balances
from plan year to plan year in accordance with the following conditions and restrictions:
a. A participant of a health FSA may carry over the lesser of (1) $500, or (ii) the balance of his/her
account. The balance of a participant's account at any point in time shall be equal to the amount
credited to the account for the plan year minus claims paid to date with respect to that plan year.
b. In general, the balance of a participant's account available for the carryover shall be determined
upon expiration of the health FSA's claim run-out period. For purposes of this Amendment, the
"claim run-out period" refers to the period of time following a plan year during which claims for
expenses incurred during that plan year may be submitted for reimbursement. Notwithstanding
the foregoing, the balance of the participant's account as of midnight on the last day of the plan
year, up to the amount specified in paragraph a. above, shall be available to reimburse expenses
incurred on and after the first day of the new plan year. The claims administrator will administer
claims submitted during the claim run out period (including allocating claims between the
participant's carryover balance and the participant's election for the new plan year (if any)) in a
manner consistent with applicable law (including regulatory guidance).
C. In general, a carryover made in accordance with the provisions of this Amendment shall occur
within t he s ame h ealth FSA . H owever, unless o therwise p rohibited u nder applicable law
(including regulatory guidance), a participant entitled to an account carryover in accordance
herewith shall receive the carryover to an account under the Plan's limited scope health FSA (if
one exists) if: (i) the participant enrolls in the limited scope health FSA for the following plan
year, or (ii) the participant directs the Plan Administrator, by no later than the last day of the
plan year from which the carryover is to be made and in accordance with procedures adopted by
the Plan Administrator, to make the carryover to the limited scope health FSA. For purposes of
this Amendment, the term"limited scope health FSA"shall refer to the health FSA, if any, that is
part of the Plan that is i ntended to be compatible with eligibility for contributions to a health
savings account.
d. In general, a carryover made in accordance with the provisions of this Amendment shall occur
automatically. However, unless otherwise prohibited under applicable law (including regulatory j
guidance), if a participant entitled to an account carryover in accordance herewith elects to waive
the ca rryover I n a ccordance w ith p rocedures a dopted b y t he P Ian A dministrator a nd t he
conditions co ntained i n the applicable r egulatory g uidance, t he c arryover shall n of o ccur,
provided the election is made no later than the last day of the plan year from which the carryover
is to be made.
Flex Plan Amendment j
Health FSA Carryover
l
IFF
e. Unless otherwise required under applicable law (including regulatory guidance), a carryover of an
account balance under a health FSA shall be available only to individuals who are eligible to make
elections under the health FSA as of the first day of the plan year to which the carryover will be
made (regardless of whether the individual actually elects to participate).
f. A carryover shall n of count against the maximum reimbursement or benefit a participant may
elect to receive under the health FSA.
5. ELIMINATION OF GRACE PERIOD UNDER HEALTH FSA( ). In no event shall a health FSA have a
grace period and a carryover with respect to the same time period. The health FSA is hereby amended
to eliminate the grace period provided thereunder. For purposes of this amendment, the term"grace
period"shall refer to the period of time following the end of a plan year during which expenses incurred
during that plan year and the new plan year may be reimbursed from the participant's account balance
attributable to the plan year that j ust ended. The first grace period to be eliminated hereunder Is the
grace period that follows the plan year referenced in Section 3 above.
f 6. SUPERSEDING EFFECT. The provisions contained herein shall apply notwithstanding any language in
the Plan to the contrary.
IN WITNESS WHEREOF,this Amendment has been executed this 16th day of_ December
2013.
By
Its Mayor.
By
Its City Clerk
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Flex Plan Amendment 2
Health FSA Carryover