10-25-2006 Additions - Laserfiche WebLink

Home Browse Search

515 Little Canada Road, Little Canada, MN 55117 -1600 (651) 766 -4029 / FAX: (651) 766-4048 ADMINISTRATOR www.ci.little- canada.mn.us Joel R. Hanson MEMORANDUM MAYOR Bill Blesener COUNCIL Jim LaValle Rick Montour Barbara Allan John Keis TO: Mayor Blesener and Members of the City Council FROM: Kathy Glanzer, City Clerk Shelly Rueckert, Finance Director DATE: October 25, 2006 RE: Medical/Dental/Day Care Flexible Spending Accounts Open enrollment for the 2007 Plan Year for the City's Medical /Dental/Day Care Flexible Spending Accounts will commence on December ls`. Currently employees as well as Council Members are allowed to set aside $3,000 annually on a pretax basis for the reimbursement of medical and dental expenses and $5,000 for the reimbursement of day care expenses. At this time, we would ask that the Council consider increasing the medical /dental portion of the plan to $4,200 for employees while retaining the $3,000 maximum for the Council. As you are aware, the risk to the City is that employees have immediate access to the full $4,200 at the beginning of the plan year, while payroll deductions occur from the employee's paycheck over the course of the year. If an employee leaves the employ of the City during the year, there is the risk that the employee would have had reimbursements in excess of deductions. These dollars could not be recovered from the employee and are the City's risk. The other side of this is that the employee may over- estimate expenses and lose money to the City at the end of the plan year or leave the City at a point where deductions exceed reimbursement. These dollars could not be recovered from the City and are the employee's risk. The reason for the recommendation that the Council's maximum remain at $3,000 is based on the level of Council compensation. 6