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MUNICIPAL ORDER NO. 1355
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
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 2008,
$7,956 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. For the plan year 2008, 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 plan acceptable to the
City in its sole discretion, shall be permitted to an employer contribution of any unspent health
insurance credits which can be applied to an HRA as established by the City and which can be
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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 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.
Section 4. For the plan year 2008, 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 be entitled to an employer contribution of unspent
credits limited to $3,216 per year which shall be applied to an HRA as established by the City
and which can be amended from time to time by order of the Board of Commissioners.
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, 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 2008 plan year starts.
ATTEST:
Tammara Brock, City Clerk
Adopted by the Board of Commissioners, December 11, 2007
Recorded by Tammara S. Brock, City Clerk, December 11, 2007
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