04-26-06 Council Minutes - Laserfiche WebLink

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MINUTES CITY COUNCII, APRIL 26, 2006 POST The City Adminish~ator reviewed the report dated April 21, 2006 EMPLOYMENT recommending approval for employee participation in a Post HEALTH CARE Employment Health Care Savings Plan as well as designation of SAVING>S ICMA-RC as the provider for this plan. The City Administrator ACCOUNT reported that City staff has looked at several plans, and feels the plan provided by ICMA-RC best meets employees' needs. He explained that this plan allows employees to set aside tax-free dollars for medical and dental expenses incurred after employmenC with Che City ends. These dollars can then be drawn Cax-free. While other plans reviewed require mandatory participation by all employees, the ICMA-RC plan includes new features which allow employees to opt in either immediately or at some point in the future. Therefore, employees can choose the point at which they wish to participate, if at all. However, once employees opt into the plan and decide on their level of participation, these choices cannot be changed. The Administrator reported that another new feature is employees can annually elect to contribute prospective leave accruals such as sick leave and vacation. SCaff is proposing the ability Co contribute cash in lieu of vacation days on an annual basis. The Administrator reported that the appropriate Personnel Policy amendment would be submitted to the Council to address this issue. The Administrator noted that the benefit plan would be available to both employees and the Council Members. He indicated thaC if approved, an information meeting will be set up with ICMA-RC to inform employees and the Council of the specifics of the plan. The Administrator noted that there is no special ruling letter or IRS regulations on the new features of the ICMA-RC plan. However, based on legal opinions obtained by ICMA-RC, they feel the risk is minimal and Chey anticipate the IRS will issue regulations consistent with the intent of this plan. The worst case scenario is Chat contributions made under the new features would be subject to income tax and penalties. Mr. LaValle introduced the following resolution and moved its adoption: RESOLUTION NO. 2006-4-703 -APPROVING THE IMPLEMENTATION OP A POST EMPLOYMENT HEALTH CARE SAVINGS ACCOUNT AND AUTHORIZING ICMA-RC AS THE VENDOR FOR THIS PROGRAM The foregoing resolution was duly seconded by Keis. Ayes (5). Nays (0). Resolution declared adopted.