HomeMy WebLinkAboutMO # 1572MUNICIPAL ORDER NO. 1572
A MUNICIPAL ORDER ESTABLISHING A POLICY FOR USE OF SPENDING
CREDITS TOWARDS THE PURCHASE OF CERTAIN BENEFITS SUCH AS HEALTH, DENTAL
OR VISION PURSUANT TO THE CITY'S GROUP HEALTH INSURANCE PLAN FOR THE 2011
PLAN YEAR
PURPOSE: The purpose of this Policy is to adopt certain procedures relating to
spending credits used by employees as a result of the City's group health insurance plan.
WHEREAS, the City sponsors a self-insured group health insurance plan as described in
the City's Employee Benefit Plan and related plan documents ("Plan"); and
WHEREAS, pursuant to this Plan the City shares the cost of medical, prescription drug,
dental and vision coverage with the City employees by contributing for the plan year 2011, $8,595 per
employee ("base credit") to be used under the Plan and other applicable credits which may be earned
pursuant to the applicable City policy; and
WHEREAS, under the City's Plan any unspent health plan credits may be used by
employees under spending arrangements established under the Plan and permitted under the United States
Internal Revenue Code in the form of Health Savings Accounts ("HSA"), Flexible Spending Accounts
("FSA") and Health Reimbursement Arrangements ("HRA"); and
WHEREAS, in order to protect the viability of the City's group health insurance plan so
as to permit the City the ability to continue to provide a mechanism for affordable health care coverage to
its employees and their families, it is necessary to adopt certain procedural changes relating to the limit of
— unspent health insurance credits by those employees who choose to opt out of the City's group health
insurance plan as well as other procedures as described below.
NOW, THEREFORE, IT IS HEREBY ORDERED as follows:
Section 1. To be eligible for the benefits provided in Section 2, employees must timely
enroll in that portion of the City's group health insurance plan referred to as medical and prescription
drug coverage.
Section 2. All eligible employees who timely apply for coverage under the City's group
health insurance plan (medical and prescription drug coverage) shall be permitted to redirect any unspent
employer contribution toward the applicable pre-tax vehicle (HSA, FSA, HRA) subject to all applicable.
federal and state laws and regulations and as may be amended from time to time by order of the Board of
Commissioners. Any changes requested by the employee due to change in family status shall be
considered on a pro -rata basis from the effective date of timely enrollment pursuant to the plan documents
of any affected benefit plan.
Section 3.
A. For the plan year 2011, all eligible employees who opt out of the City's group health
insurance plan (medical and prescription drug coverage) but can show proof of coverage under a spouse's
employer-sponsored group health insurance or other group sponsored health -insurance plan acceptable to
the City in its sole discretion, shall be permitted to an employer contribution of any unspent health
insurance credits limited to $3,000 which can be applied to an HRA, deposited on an as accrued basis, as
established by the City and which can be amended from time to time by order of the Board of
Commissioners. In the event the City in its sole discretion does not accept the creditability of the
spouse's employer-sponsored group health insurance plan, other group sponsored health insurance plan,
or non -group sponsored health insurance plan, and the employee chooses to remain covered under such
spouse's group health insurance plan, then such employee shall be governed under the procedures
established in Section 4.
B. For the plan year 2011, all eligible employees who opt out of the City's group
health insurance plan to enroll in a health insurance plan that is not under a spouse's employer-sponsored
group health insurance or other group sponsored health insurance plan shall not be permitted to an
employer contribution of any unspent health insurance credits.
Section 4. For the plan year 2011, all eligible employees who opt out of the City's group
health insurance plan (medical and prescription drug coverage) for any reason other than those stated in
Section 3 above, shall not be entitled to an employer contribution of unspent credits.
Section 5. For all employees who subsequently become eligible for coverage under the
City's group health insurance plan because of initial employment or a qualifying event (i.e., change in
family status), and is timely enrolled under the Plan or opts out of the Plan, shall be governed under the
same procedures described in Sections 1-4 above, except any benefits shall be applied on a pro -rata basis.
Section 6. Except as provided under the applicable plan document covering any benefit
plan, or HIPAA's special enrollment rights or the United States Internal Revenue Code, or any other
applicable federal or state law or regulation, or any participant in the City's group health plan as described
in Section 2 or any employee who has opted out of the plan as described in Sections 3 or 4 above, shall be
precluded from making any changes to pre-tax elections (HSA, FSA, HRA) once the 2011 plan year starts
except as otherwise permitted by this Municipal Order.
Section 7. This municipal order shall supersede M.O. 1410 adopted on October 28, 2008.
Section 8. This Order shall be in full force and effect from and after the date of its
adoption.
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Tammara Brock, City Clerk
Adopted by the Board of Commissioners, October 26, 2010
Recorded by Tammara S. Brock, City Clerk, October 26, 2010
mo\ins policy credits 2011
96800
2