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in and out (deducted bi- weekly and reimbursed the same), there is less risk to both the <br />employee and the City of losing dollars under the scenarios described above. <br />These accounts would be managed by a plan administrator at a cost to both the City and <br />employees. However, given the FICA savings (7.65 %) that is realized by both the City <br />and the employee, it is felt that $10,000 in participation levels (annual planned <br />expenditures by all employees in qualified areas) will result in an offset of plan <br />administration fees. There would be some cost in City staff time, but it is felt that this <br />cost would be very minimal. <br />If the Council is agreeable in implementing this program for City employees, staff would <br />choose a plan administrator. The Council would have to set the annual election limit for <br />City employees. Additional research can be done in this regard, but a $2,500 to $3,500 <br />per employee is a likely range. <br />Post Employment Health Care Savings Plan <br />Another program we ask Council to consider would be the establishment of a Post <br />Employment Health Care Savings Plan. Under this plan employees can build a tax -free <br />savings account to offset health care expenses for the employee, spouse, and eligible <br />dependents that can be utilized once the employee leaves the employment of the City. <br />The money in this fund is tax -free both going in and going out. This program is unique <br />to governmental entities. <br />A plan administrator would be chosen should the Council approve this program. Costs <br />associated with plan administration are charged against the employee's individual <br />account and there are no direct charges to the City. There would be some staff time <br />involved, but again that time would be minimal. The City would realize FICA savings on <br />the funds that employees contribute toward the plan. <br />If this program is implemented, all employees are required to participate in the plan. <br />There is no individual choice as to whether to participate or not. The City would design <br />the parameters of its plan, the key component being funding sources. Some funding <br />examples include a designated percentage of pay or lump sum contributions on a <br />scheduled basis, contribution of unused vacation days, etc. The plan could be designed to <br />minimize impact on younger employees, as exampled below: <br />0 to 5 years of service <br />6 to 10 years of service <br />11 to 15 years of service <br />Etc. <br />No contribution <br />1% of annual pay <br />2% of annual pay <br />