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u1 a. <br />Wit ar 1 the Wanala <br />MAYOR <br />Bill Blesener <br />COUNCIL <br />Rick Montour <br />Barbara Allan <br />John Keis <br />Michael McGraw <br />U / ADMINISTRATOR <br />515 Little Canada Road, Little Canada, MN 551174600 Joel R. Hanson <br />[651) 766 -4029 / FAX: [651) 766 -4048 <br />www. ci.little- canada.mn.us <br />MEMORANDUM <br />TO: Mayor Blesener and Members of the City Council <br />FROM: Kathy Glanzer, City Clerk <br />DATE: July 9, 2008 <br />RE: Flexible Spending Account <br />Administrator Change to SelectAccount <br />For the past few years, City employees have been able to participate in a Flexible <br />Spending Account (FSA) Plan which allows them to pay medical, dental, and dependent <br />care expenses with pre -tax dollars if they so choose. The Plan was initially administered <br />by Passport Services, which was bought out by Discovery Benefits approximately two <br />years ago. Since Discovery Benefits has taken over the administration of the City's FSA, <br />we have had numerous service problems, especially at the beginning of year when <br />volume levels increase. It is apparent to us that Discovery Benefits does not have <br />adequate staff to handle their workload <br />Consequently, City staff is recommending that the administration of our FSA be <br />transferred from Discovery Benefits to SelectAccount effective August 1, 2008. <br />SelectAccount is the administrator of the City's Health Spending Account (HSA) Plan <br />which works in conjunction with the high - deductible medical insurance plan. In addition <br />to staff's hope that service problems will be resolved by this change, it will also be more <br />efficient to have one administrator for both plans. <br />The cost to the City in making this change will actually decrease. (Please remember that <br />this cost is offset by the savings the City realizes in FICA payments on the money that <br />employees allocate to the FSA account.) Comparison of costs is below: <br />Discovery Benefits $75 /month <br />Select Account $5 /month per participant. We currently have 7 <br />participants, therefore, the cost is $35 /month, <br />plus a $150 annual renewal fee. <br />Staff recommends the change in FSA administrator to SelectAccount with authorization <br />to execute transfer documents. <br />2 <br />