Resolution No. 95871
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RESOLUTION NO. 9587
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF
AN ADMINISTRATIVE SERVICES AGREEMENT WITH IGOE &
COMPANY INCORPORATED, DBA IGOE ADMINISTRATIVE
SERVICES, REGARDING THE CITY'S FLEXIBLE BENEFIT
PLAN
WHEREAS, the City of Vernon had an agreement with Igoe &
Company Incorporated dba Igoe Administrative Services ("Igoe") to
provide administrative services for the Flexible Benefit Plan (the
"FSA") for the period May 1, 2007 through December 31, 2007; and
WHEREAS, the City Council of the City of Vernon desires to
renew the FSA for the period January 1, 2008 through December 31,
2008, and authorize the payment of fees in the approximate sum of
$2,700.00 plus additional services as requested; and
WHEREAS, Igoe has provided an Administrative Services
Agreement (the "Agreement") that incorporates the terms and conditions
of the Renewal; and
WHEREAS, the City Council desires to approve the Agreement
1with Igoe for administration of the FSA.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
finds and determines that the recitals contained hereinabove are true
and correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Administrative Services Agreement with Igoe, in
substantially the same form as the copy which is attached hereto as
Exhibit A and incorporated by reference.
I SECTION 3: The City Council of the City of Vernon hereby
2 authorizes the Mayor or Mayor Pro-Tem to execute said Agreement for,
3 and on behalf of, the City of Vernon and the City Clerk is hereby
4 authorized to attest thereto.
5 SECTION 4: The City Council of the City hereby authorizes
6 the City Administrator, or his designee, to make whatever non-
7 substantive, administrative and/or text changes, upon advice of
8 counsel, to the Agreement.
9 SECTION 5: The City Council of the City of Vernon hereby
10 directs the City Clerk, or her designee, to send a fully executed
11 Agreement to:
12 IGOE Administrative Services
Attn. Michael C. Igoe, President & CEO
13 16769 Bernardo Center Drive, Suite 21
14 San Diego, CA 92128-2548
15 SECTION 6: The City Clerk of the City of Vernon shall
16 certify to the passage of this resolution, and thereupon and
17 thereafter the same shall be in full force and effect.
18 APPROVED AND ADOPTED this 7th day of April, 2008.
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Name: Leonis C. Malburg
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Title: Mayor �,— Mayor --- ---
- - C='
24 ATTEST:
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27 MAUELA GIRON, i y Clerk
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STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, MANUELA GIRON, City Clerk of the City of Vernon, do hereby
certify that the foregoing Resolution, being Resolution No. 9587, was
duly adopted by the City Council of the City of Vernon at a regular
meeting of the City Council duly held on Monday, April 7, 2008, and
thereafter was duly signed by the Mayor Pro-Tem of the City of Vernon.
MANUELA GIRON, C ty Clerk
(SEAL)
- 3 -
EXHIBIT A
January 17, 2008
Ms. Karina Rueda
City of Vernon
4305 Santa Fe Ave.
Vernon, CA 90058
RE': Flexible Benefit Plan Administrative Services Agreement
Dear Ms. Rueda:
Thank you for choosing Igoe & Company Incorporated, dba Igoe Administrative Services. We are
pleased to provide administrative services for your Flexible Benefit Plan. Our goal is to offer you and your
Flex participants specialized options with personal, approachable service.
Following is the Administrative Services Agreement for the City of Vernon Flexible Benefit Plan. In order
to finalize our agreement, please print, sign and date two copies of this agreement, retain one copy for your
records and return one fully executed agreement to us.
If you have not yet sent your implementation and/or renewal fee, please note payment for implementation
and/or renewal services must be received in full before we can complete implementation of your Plan. This
fee covers preparation of the master set of enrollment materials, load -on of all new enrollees, non-
discrimination testing, creation of new plan documents (if necessary), as well as any document
amendments necessary to keep your Plan in compliance for the Plan Year beginning January 1, 2008 and
ending December 31, 2008. If you have already sent your implementation and/or renewal fee, thank you
for your promptness.
We value our partnership and appreciate your business!
Sincerely
Michael C. Igoe
President & CEO
Enclosures
cc: Brenda Lee (Gallagher Benefit Services, Inc.)
16769 Bernardo Center Drive, Suite 21 San Diego, CA 92128-2548
858-673-3670 800-633-8818 Fax No. 858-673-3666 888-357-6307 wwwadgoe:com
City of Vernon Flexible Benefit Plan
Administrative Services Agreement
This Agreement specifies the services to be provided to City of Vernon, in the ongoing administration of the City of
Vernon Flexible Benefit Plan (the 'Plan" P'Covered Entity") as well as the specified responsibilities of City of Vernon
(the "Plan Administrator"/"Plan Sponsor") and Igoe & Company Incorporated, dba Igoe Administrative Services (the
"Contract Administrative Firm"/"Business Associate"). The Contract Administrative firm ("Business Associate") shall be
engaged by the Plan Administrator/Plan Sponsor as a subcontractor in the performance of administrative services for the
Plan.
1. In accordance with the terms of this Agreement, the Contract Administrative Firm shall have the following
responsibilities:
A. The Contract Administrative Firm shall provide Flexible Benefit Plan services in accordance with this
Agreement, as requested by the Plan Administrator/Plan Sponsor in connection with the Plan.
B. The Contract Administrative Firm shall consult with Plan Administrator/Plan Sponsor on the design of the
Plan.
C.
FBI
E
F
The Contract Administrative Firm shall provide the Plan Administrator/Plan Sponsor with the following
sample documentation in order to initiate the administrative function:
(i) A sample Plan Document for review; and potential adoption by Plan Sponsor and Plan Sponsor's
legal counsel;
(ii) A master set of Employee Communication/Enrollment Materials, including:
a. A Summary Plan Description; and
b. Election Forms to be used during the Enrollment Process; and
C. Reimbursement Request Forms; and
d. Instructions for filing claims for reimbursement and appeals procedures.
The Plan Sponsor is not required to adopt or utilize the sample Plan Documents, Enrollment Materials or
Forms provided by the Contract Administrative Firm and may use its own forms; subject to, review by the
Contract Administrative Firm. Contract Administrative Firm makes no warranties, or representations
regarding the adequacy of such documentation. Additional fees may apply if additional work is required
to process enrollments or reimbursements if the forms submitted by the Plan Administrator/Plan Sponsor
do not comply with the Contract Administrative Firm's requirements.
At the request of the Plan Administrator/Plan Sponsor, the Contract Administrative Firm shall conduct
enrollment meetings to explain the Plan to employees. Additional fees will apply for this service
(including travel expenses), based on the rates outlined in Exhibit A of this Agreement.
Process Reimbursement Requests, including determining the eligibility of expenses which qualify for
reimbursement; provide an explanation in a written format for any expenses submitted which do not
qualify for reimbursement under IRS regulations; provide instructions to participants for re -submitting
requests in instances where required information may be missing. In the event of an appeal by a
participant, the Contract Administrative Firm agrees to reimburse expenses based on final claims
approval provided by the Plan Administrator/Plan Sponsor.
The Contract Administrative Firm will use the Plan Administrator/Plan Sponsor's Flexible Benefit Plan
CJFl a LLB"
11172008 AUMINISTRArive SERvi[E5
checking account or make other arrangements with such, employer, as so directed by the Plan
Administrator/Plan Sponsor, in order to process participant reimbursements.
G. Provide a check register or similar report to the Plan Administrator/Plan Sponsor for all transactions
posted during each processing period.
H. Conduct Non-discrimination testing on the 125 Plan(s), based on information provided by the Plan
Administrator/Plan Sponsor, and provide Plan Administrator/Plan Sponsor with a written interpretation
following each open enrollment period:
1. Provide a contribution worksheet for Plan Administrator/Plan Sponsor to reconcile payroll contribution
amounts to be redirected into the Flexible Benefit Plan prior to each payroll period.
J. Provide sample forms for the Plan Administrator/Plan Sponsor to communicate participant terminations
and qualifying change in status events to the Contract Administrative Firma
K. Provide a year-to-date report of account balances, reimbursements, paid, and scheduled payroll
contributions amounts for all participants enrolled in the Flexible Spending Accounts for each month.
L. Provide preparation of IRS Form 5500, if applicable, following the close of each Plan Year.
M. The Contract Administrative Firm will attend any audit or hearing held by a government agency or bureau
regarding compliance issues directly pertaining to administration services performed by Contract
Administrative Firm during the term of this Agreement and will provide any and all requested documents
in their possession. This provision will survive the expiration or termination of this Agreement.
2. Business Associate Contract Provisions:
A. For purposes of this Agreement, the Contract Administrative Firm, Igoe & Company Incorporated dba
Igoe Administrative Services means the "Business Associate" and the City of Vernon Flexible
Benefit Plan means the "Covered Entity". All definitions referred to in the Business Associate Contract
Provisions of this Agreement shall have the same meaning as those described in 45 CFR §§ 160.103,
164.103, 164.304 and 164.501.
B. Obligations and Activities of Business Associate in accordance with HIPAA regulations regarding
Protected Health Information (PHI) and Electronic Protected Health Information (EPHI):
(i) Business Associate agrees to not use or further disclose Protected Health Information other than
as permitted or required by the Agreement or as required by law.
(ii) Business Associate agrees to use appropriate safeguards to prevent use or disclosure of the
Protected Health Information other than as provided for by this Agreement.
(iii) Business Associate agrees to mitigate, to the extent practicable, any harmful effect that is known
to Business Associate of a use or disclosure of Protected Health Information by Business
Associate in violation of the requirements of this Agreement.
(iv) Business Associate agrees to report to Covered Entity any use or disclosure of the Protected
Health Information not provided for by this Agreement for which it becomes aware.
Business Associate agrees to ensure that any agent, including a subcontractor, to whom it pro-
vides Protected Health Information received from, created or received by Business Associate on
behalf of Covered Entity agrees to the same restrictions and conditions that apply through this
Agreement to Business Associate with respect to such information:
Z6-- 0E
111712008 AC11V11N15YNAfi1VE 5ENV1CC9
(v
(vi) Business Associate agrees to make internal practices, books, and records relating to the use and
disclosure of Protected Health Information received from, or created or received by Business
Associate on behalf of, Covered Entity available to the Covered Entity, or at the request of the
Covered Entity to the Secretary, in a time and manner designated by the Covered Entity or the
Secretary, for purposes of the Secretary determining Covered Entity's compliance with the
Privacy Rule.
(vii) Business Associate agrees to document such disclosures of Protected Health Information and in-
formation related to such disclosures as would be required for Covered Entity to respond to a
request by an Individual for an accounting of disclosures of Protected Health Information in
accordance with 45 CFR §164.528.
(viii) Business Associate agrees to implement any and all administrative, technical and physical
safeguards necessary to reasonably and appropriately protect the confidentiality, integrity and
availability of electronic Protected Health Information that it creates, receives, maintains or
transmits on behalf of Covered Entity.
(ix) Business Associate agrees to ensure that access to Electronic Protected Health information
related to the Covered Entity is limited to those workforce members who require such access
because of their role or function.
(x) Business Associate agrees to implement safeguards to prevent its workforce members who are
not authorized to have access to such Electronic Protected Health Information from obtaining
access and to otherwise ensure compliance by its workforce with the Security Rule.
(xi) Business Associate agrees to ensure that any agent, including a subcontractor, to whom it
provides Electronic Protected Health Information ('ePHI") received from, or created or received
by Business Associate on behalf of, Covered Entity agrees to implement appropriate safeguards
to protect the ePHI.
(xii) Business Associate agrees to report to Covered Entity, in writing, any security incident of which it
becomes aware. Security incident shall mean successful unauthorized access to, disclosure,
modification or destruction of, or interference with, the Electronic Protected Health Information by
a third party. In such instances, Business Associate shall identify: the date of the security
incident, the scope of the security incident, the Business Associate's response to the security
incident and the identification of the party responsible for causing the security incident, if known.
(xiii) Upon request from Covered Entity, Business Associate agrees to provide information to Covered
Entity on unsuccessful unauthorized access, use, disclosure, modification or destruction of the
Electronic Protected Health Information to the extent such information is available to Business
Associate. Business Associatereserves the right to provide such information on a monthly basis
as an aggregate number.
(xiv) As required by the Security Rule, Business Associate agrees to treat a material breach of this
Agreement as a breach of the Agreement and to an early termination of the Agreement by
Covered Entity.
C. Permitted Uses and Disclosures by Business Associate
Except as otherwise limited in this Agreement, Business Associate may use or disclose Protected Health
Information to perform functions, activities, or services for, or on behalf of, Covered Entity as specified in
this Agreement, provided that such use or disclosure would not violate the Privacy Rule if done by
Covered Entity.
3. The Contract Administrative Firm is willing to perform the services described in this Agreement, provided that
Contract Administrative Firm shall not assume the responsibilities of the Plan Administrator/Plan Sponsor under
the Plan, and provided that Contract Administrative Firm shall not constitute or be deemed or construed to
111712008 ADMINISTRATIVE SERVICES
constitute the "Plan Administrator' of the Plan as such term is defined in the Plan and within the meaning of
ERISA Section 3(16). The Contract Administrative Firm will use reasonable care and due diligence in the
performance of its responsibilities hereunder. In addition, except as expressly set forth herein, the Contract
Administrative Firm shall not be a "fiduciary" of the Plan as such term is defined in ERISA Section 3(21). Plan
Administrator/Plan Sponsor agrees that this responsibility is, and remains, that of the Plan Administrator/Plan
Sponsor.
4. In accordance with the terms and conditions of this Agreement, the Plan Administrator/Plan Sponsor agrees to
the following:
A. The Plan Administrator/Plan Sponsor desires to engage the Contract Administrative Firm to provide
professional services in accordance with this Agreement, and the Contract Administrative firm desires to
accept such engagement.
B. The Plan Administrator/Plan Sponsor shall administer the Plan or appoint a person or committee to
administer the Plan (the "Plan Administrator').
C. The Plan Administrator/Plan Sponsor understands and acknowledges that Contract Administrative Firm is
responsible only for providing the services specifically allocated to the Contract Administrative Firm in this
Agreement.
D. If using a vendor for electronic enrollment for your group health benefits, the Plan Sponsor/Plan
Administrator shall remain ultimately responsible for the accuracy of the Flexible Benefit Plan elections
and all related records. The Plan Sponsor/Plan Administrator is responsible for capturing all electronic
enrollment data and transmitting it to the Contract Plan Administrator 2& to the appropriate effective
dates. The Plan Sponsor/Plan Administrator to review such reports and to provide corrections as
needed. The Contract Plan Administrator will continue to provide all reporting as outlined in this
Agreement.
E
F
G.
The Plan Administrator/Plan Sponsor agrees to have the specimen Plan Documents provided by the
Contract Administrative Firm reviewed and approved by the Plan Sponsor's legal counsel. Upon this
review, the Plan Administrator /Plan Sponsor agrees to supply the executed Plan Documents for review
by participants upon request within a reasonable amount of time. In addition, the Plan
Administrator/Plan Sponsor agrees to provide a Summary Plan Description to each participant upon
enrollment in the Plan and to communicate any changes which may be made to the Plan and/or the
Summary Plan Description accordingly.
The Plan Administrator/Plan Sponsor shall establish a zero -balance Flexible Benefit Plan checking
account or make other arrangements with such employer in order for the Contract Administrative Firm to
process claims for reimbursement under the Plan.
The Plan Administrator/Plan Sponsor shall report all participant terminations and all qualifying change in
status events in a written format, including all requested information, to the Contract Administrative Firm
prior to the first affected payroll date. Should this information not be provided in a complete or timely
manner, the Plan Administrator/Plan Sponsor agrees to pay any resulting administrative fees which may
be incurred in order to process retroactive adjustments to payroll contributions or reimbursement claims
processed in error.
The Plan Administrator/Plan Sponsor shall provide the Contract Administrative Firm, confirmation of
redirections into the flexible Benefit Plan, based on reports provided by the Contract Plan Administrative
111712008 AOMINISTRATIVE'smvirts
Firm, in a timely manner, thus allowing the Contract Administrative Firm to post contributions for the
purpose of processing reimbursements. Should this information not be received in a'complete and timely
manner, the Plan Administrator/Plan Sponsor agrees to pay any resulting administrative fees required to
process any retroactive changes, as fees for this service are not covered under this Agreement.
I. The Plan Administrator/Plan Sponsor agrees to provide to the Contract Administrative Firm, upon each
open enrollment period and with each new enrollment in the Plan, all required data to perform IRS -
required 125 Plan Non-discrimination Testing. The Plan Administrator/Plan Sponsor agrees to report any
changes to the Contract Administrator, which may affect the qualification of the Plan for meeting Non-
discrimination requirements. in addition, the Plan Administrator/Plan Sponsor agrees to initiate any
action required in the event the Plan is reported as discriminatory.
J. The Plan Administrator/Plan Sponsor shall retain documentation relating to Plan operations that may be
requested in IRS or Department of Labor audit of Plan operations - including, but not limited to: Non-
discrimination testing information, executed copies of the Plan, Salary Redirection Agreements
("Enrollment Forms"), Plan Amendments, Resolutions adopting the Plan, and Form 5500s, (if applicable),
for seven years after the close of each Plan Year.
K. The Plan Administrator/Plan Sponsor shall ensure that only common law employees participate in the
Plan [employees of companies described in IRC Section 414 (b), (c) or (m) and listed in the Plan as
participating affiliates may also participate] and to ensure that the terms of its Plan Document are
properly enforced:
L. The Plan Administrator/Plan Sponsor shall provide all requested information on a timely basis for Igoe
Administrative Services to file an annual Form 5500 Return, if applicable, for the cafeteria plan within
seven months following the close of each plan year. In addition, the Plan Sponsor may be required to
provide requested information in order for Igoe Administrative Services to file Form 5500 Annual Returns
for the component benefit plans offered through the cafeteria plan, (component benefit plans would be a
multiple plan including Premium Conversion Plans, Dependent Care FSA and/or Medical FSA).
M. The Plan Administrator/Plan Sponsor shall provide the required information on a timely basis in order for
Igoe Administrative Services to perform Non-discrimination testing required by the Internal Revenue
Code for 125 Plan(s) (including, but not limited to: ensuring that a non-discriminatory classification —of
employees is eligible for the plan, that contributions and benefits do not discriminate in favor of highly
compensated employees, and that no more than 25% of the total pre-tax benefits is received by officers
and owners). Additional information may be required in order for Igoe Administrative Services to conduct
Non-discrimination testing for the component benefits offered through the cafeteria plan (including
insurance and flexible spending account benefits). Igoe Administrative Services will perform Non-
discrimination testing shortly after enrollment:
N. At each month -end the Contract Administrative Firm will submit a statement showing the amount of fees
for that month pursuant to Exhibit A. The Plan Administrator/Plan Sponsor will pay the Contract
Administrative firm the full amount within 10 days of receipt of the statement.
0. (If Applicable) - If a flex Plan participant uses his/her Flex benefits card for a transaction that falls
outside of the benefits card parameters set forth by IRS, a request for substantiation will be sent
automatically via e-mail. If no response is received within 14 days a second electronic letter will be sent.
If no response is received within 7 days, the benefits card will be deactivated and the expense deemed
ineligible.
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1/17/2008 AOMINIS'fmrjvEsmv1a5
Once a card is deactivated, the participant will no longer have the ability to use their card until he/she
provides resolution through one of the following methods. In either case the employer will be charged
$25.00 per reactivation (this fee maybe passed to the plan participant at the employer's discretion):
• Provide receipts as substantiation to Igoe Administrative Services along with a copy of the letter
he/she received. The information may be faxed to 858-777-5424. Upon receipt, the transaction will
be adjudicated therefore reactivating the benefits card. The employer will be charged $25.00 per
reactivation.
• Refund the Flexible Benefit Plan equal to the amount of the transaction via either a payroll deduction
or a personal check. Upon notification from the employer that the refund is complete, the transaction
will be reversed therefore reactivating the benefits card. The employer will be charged $25.00 per
reactivation.
• The employer may add the amount of the ineligible transaction to the employee's W-2 as taxable
income. Upon notification from the employer that this action is being taken, the transaction will be
adjudicated therefore reactivating the benefits card. The employer will be charged $25.00 per
reactivation.
5. Obligations of Covered Entity in accordance with HIPAA regulations regarding Protected Health Information
(PHI):
A. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of Protected
Health Information that Covered Entity has agreed to in accordance with 45 CFR 164.522, to the extent
that such restriction may affect Business Associate's use or disclosure of Protected Health Information.
B. Covered Entity shall not request Business Associate to use or disclose Protected Health Information in
any manner that would not be permissible under the Privacy Rule if done by Covered Entity.
6. Plan Administrator/Plan Sponsor acknowledges that they have read this Agreement in its entirety and Plan
Administrator/Plan Sponsor acknowledges that it has been advised to consult with, and has consulted as it deems
necessary, its own attorney with respect to the matters herein, and acknowledges that Contract Administrative
Firm is not providing any tax or legal advice as a result of its professional services under this Agreement. In
addition, the Plan Administrator/Plan Sponsor agrees to the fees outlined in Exhibit A and Exhibit B of this
Agreement. Failure to pay fees when due may result in termination of this Agreement. The Administrative Fee
Schedule, which is attached to this Agreement as Exhibit A, is made a part hereof as of the effective date of this
Agreement.
7. Should either party institute legal action to enforce its rights under this Agreement, the venue shall be in San
Diego County, State of California, and the prevailing party in such action shall be entitled to recover reasonable
attorney's fees and costs.
8. Should Plan Administrator/Plan Sponsor, at any time during the coverage period of this Agreement, file in the
United States for the Debt Relief or Reorganization of any type, all services from the date of the filing forward to
the endof the contract period shall be paid for by cashier's check or money order prior to work being performed
by the Contract Administrative Firm.. All other terms and conditions of the contract shall remain in effect.
9. Plan Administrator/Plan Sponsor agrees to accurately complete an administrative instruction/summary form, as
supplied by the Contract Administrative Firm, upon implementation or renewal of the Plan. Plan
Administrator/Plan Sponsor agrees that these forms will provide the basis of the Contract Administrative Firm's
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1/17/2008 ALLMINISTRATIVE suivias
administrative actions under this Agreement. Further, Plan Administrator/Plan Sponsor agrees that any changes
to the information supplied on these forms ' may only be made in writing and are only effective when
acknowledged by the Contract Administrative Firm in writing. Additional fees may be incurred for any retroactive
changes made after the Plan Administrator/Plan Sponsor has agreed to the administration design in writing or for
any changes which may be requested mid -year (after the open enrollment period).
10. Term and Termination,
A. Term. This Agreement shall govern the contract period beginning January 1, 2008 and ending
December 31, 2008, unless terminated earlier by either party at any given time upon thirty (30) days
written notice:
B. The Term of this Agreement shall be effective as of the date of the signature on this Agreement, and, with
respect to HIPAA Privacy Rules, this Agreement shall terminate when all of the Protected Health
Information provided by Covered Entity to Business Associate, or created or received by Business
Associate on behalf of Covered Entity, is destroyed or returned to Covered Entity, or, if it is infeasible to
return or destroy Protected Health Information, protections are extended to such information, in
accordance with the termination provisions in this Section.
C. Termination for Cause. With respect to HIPAA Privacy Rules, upon Covered Entity's knowledge of a
material breach by Business Associate, Covered Entity shall provide an opportunity for Business
Associate to cure the breach or end the violation and terminate this Agreement and the Administrative
Services Agreement if Business Associate does not cure the breach or end the violation within the time
specified by Covered Entity, or immediately terminate this Agreement and the Administrative Services
Agreement sections if Business Associate has breached a material term of this Agreement and cure is
not possible.
D. Effect of Termination.
i. Except as provided for above with respect to HIPAA Privacy Rules, upon termination of this
Agreement, for any reason, Business Associate shall return or destroy all Protected Health
Information received from Covered Entity, or created or received by Business Associate on
behalf of Covered Entity. This provision shall apply to Protected Health Information that is in
possession of subcontractors or agents of Business Associate. Business Associate shall retain
no copies of the Protected Health Information.
ii. In the event that Business Associate determines that returning or destroying the Protected Health
Information is infeasible, Business Associate shall provide to Covered Entity notification of the
conditions that make return or destruction infeasible. Upon mutual agreement of the Parties that
return or destruction of Protected Health Information is infeasible, Business Associate shall
extend the protections of this Agreement to such Protected Health Information and limit further
uses and disclosures of such Protected Health Information to those purposes that make the
return or destruction infeasible, for so long as Business Associate maintains such Protected
Health Information.
Miscellaneous;
A. AppliLaDl,Lm. This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
Ciro G__ CE
1/17/2008 AUNVINISTRATIVESUMMS
B.
C.
D.
E.
F.
Assignability. This Agreement and the rights, benefits, privileges, duties and responsibilities of the
parties hereto may not be assigned by any other party hereto without the prior written consent of the
parties hereto.
Amendment. In regard to Protected Health Information (PHI), the Parties agree to take such action as is
necessary to amend this Agreement from time to time as is necessary for Covered Entity to comply with
the requirements of the Privacy Rule and the Health Insurance Portability and Accountability Act, Public
Law 104-191:
Binding Nature of Agreement. This Agreement is binding upon signature by both parties and shall inure
to the benefit of the heirs, executors, successors and assignors of the parties hereto.
Complete Agreement. This Agreement and all accompanying Exhibits constitute the complete
Agreement of the parties regarding its subject matter and replaces and supersedes any prior writtenor
oral agreement between the parties regarding its subject matter.
Confidentiality. The Contract Administrative Firm will maintain the confidentiality of all records and
information obtained in conjunction with the services to be performed hereunder in accordance with
HIPAA Privacy regulations. The information therein shall not be divulged or disclosed or made available
to persons, other than the Plan Sponsor/Plan Administrator, without written approval by the Plan
Sponsor/Plan Administrator or a court of competent jurisdiction. This paragraph will survive the
termination or expiration of the Agreement.
G. Construction and Severability. The captions of this Agreement and its paragraphs and subparagraphs
are for the convenience of the parties only and shall not be taken in account in the construction and
interpretation of this Agreement. The terms of this Agreement are severable; should any portion of this
Agreement be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement and this Agreement shall be construed and interpreted
as though such invalid or unenforceable provision was not contained herein.
L.
Independent Contractor: The Contract Administrative Firm's relationship with Plan Administrator/Plan
Sponsor is that of independent contractor and nothing in this Agreement shall be construed as creating
the relationship of employer or employee between the Plan Administrator/Plan Sponsor and officers,
employees, or agents of the Contract Administrative Firm or the relationship of a partnership or joint
venture between the parties, as outlined in Section 4 of this Agreement.
Interption. In regard to Protected Health Information (PHI), any ambiguity in this Agreement shall be
resolved in favor of a meaning that permits Covered Entity to comply with the Privacy Rule.
Modification : This Agreement may not be modified or amended except by means of written modification
or amendment of this Agreement or their legal successors in interest.
Reg.ulatory References. All references in this Agreement to a section in the Privacy Rule means the
section as in effect or as amended, and for which compliance is required under the Health Insurance
Portability and Accountability Act, Public Law 104-191.
Survi a . The respective rights and obligations of Business Associate under HIPAA Privacy Rules, as
outlined in this Agreement, shall survive the termination or expiration of this Agreement.
111712008 AUMIN15TNATIVE 5ERViMS
M. Warranties. No representations or warranties have been provided by any party to, this Agreement or to
any other party to this Agreement except as specifically set forth in this Agreement.
12. Indemnification of the Contract Administrative Firm ("Business Associate") and the Plan Administrator/Plan
Sponsor ("Covered Entity")
Contract Administrative Firm/Business Associate shall indemnify, defend and hold harmless Plan
Administrator/Plan Sponsor, its affiliates, directors, officers and employees or any of them from any claim,
expense, loss, damage, settlement, judgment, penalty and liability, including reasonable attorneys' fees and court
costs (individually and collectively, "Claims") resulting in any way from or arising out of Contract Administrative
Firm's/Business Associate's performance of or failure to perform this Agreement, including, without limitation,
Claims resulting from or arising out of acts or omissions by Contract Administrative Firm/Business Associate, its
employees, officers, directors, agents, or other individuals who provide services under this Agreement.
Plan Administrator/Plan Sponsor shall indemnify, defend and hold harmless Contract Administrative
Firm/Business Associate, its affiliates directors, officers and employees or any of them from any claim, expense,
loss, damage, settlement, judgment penalty and liability including reasonable attorney's fees and court costs
(individually and collectively, "Claims") resulting in any way from or arising out of Plan Administrator's/Plan
Sponsor's performance of or failure to perform this Agreement, including, without limitation, Claims resulting from
or arising out of acts or omissions by Plan Administrator/Plan Sponsor, its employees officers, directors, or
agents.
[Signatures Follow on Next Page]
The Parties to the agreement consent and agree to all of the provisions and by their signature cause this
Agreement to become effective as of the date of signature. Remittance of and acceptance of payment for
services hereby -binds both parties to this agreement.
City of Vernon Flexible Benefit Plan
("Covered Entity„)
By:
Dater
Plan Sponsor/Plan Administrator:
City of Vernon
By:
Date:
Contract Administrative Firm
("Business Associate")
By;
Date: January 17,2008
EXHIBIT A: ADMINISTRATIVE FEE SCHEDULE
City of Vernon
RATES EFFECTIVE JANUARY 1, 2008
MONTHLY ADMINISTRATIVE CHARGES - Flexible Spending Accounts
Monthly Administration Fee: $200.00
ADMINISTRATIVE SERVICES INCLUDED IN ABOVE FEE
The followina services are included in the monthly administration fee
Actual Postage Expenses
INCLUDED
Multiple Payroll Cycles
INCLUDED
For example: weekly & bi-weekly, monthly & weekly, etc.
Plan Year End Run Out Period Processing
INCLUDED
Igoe will process Run Out Period reimbursement submittals on a set administrative schedule.
Electronic Enrollment Confirmation
INCLUDED
Igoe Administrative Services will send an enrollment confirmation at the start of the plan year to all plan participants that
provide an e-mail address.
Electronic Plan Year End Reminder Notification
INCLUDED
Igoe Administrative Services will send an reminder notification including run out deadlines to all plan participants that provide
an e-mail address.
OPTIONAL SERVICES
Any services not explicitly outlined in this Agreement may require additional fees. Optional services may include; but are not limited to,
Specialized Reporting, Additional Services, Information Systems Programming or Consultation. Fees for these services will be determined based
on the time required to complete said service and will be agreed to by both parties prior to performance of such services.
ANNUAL RE -ENROLLMENT FEE
Provided Igoe Administrative Services and the client mutually accept future services; Igoe Administrative Services reserves the right to charge an
Annual Enrollment Fee. The client will be provided with a proposal of fees for the new Plan Year no later than 60 days before the end of the
current Plan Year. All fees for services must be paid in full prior to the preparation of any renewal materials. Included services are:
♦ Load -on of all new enrollments and building of new database for each Plan Year
Add new participants after initial set up of Plan
Preparation of new master enrollment materials
The minimum monthly fee will apply when a client chooses not to renew for the next Plan Year and requests Igoe Administrative Services to
administer the Plan Year Run Out Period for the ending Plan Year.
OPTIONAL ADMINISTRATIVE FEES
The following services are not included in the administration fees. The client will incur additional fees when these
services are required or requested.
Adjustments/Corrections/Changes of Status
$100.00
Fee applies for when additional services are required.
PER HOUR
Examples of additional services: void & re -issue of checks, failed direct deposit, correction of
(BILLED IN A HOUR INCREMENTS, WITH A MINIMUM OF % HOUR)
incorrect data submitted on forms, etc.
2.5 Month Grace Period Processing (Extension Period)
$100.00
Igoe Administrative Services will process the up to 2.5 Month Grace Period (formerly known as the
PER MONTH DURING
Extension Period). reimbursement submittals on a set administrative schedule.
GRACE 3 MONTH MAX
Special Check Run
$25.00
Checks produced on non-scheduled processing day. Additional fees will apply when client requests
PER SPECIAL RUN
replacement check be generated prior to next scheduled processing day
Direct Deposit Set-up
$100.00
Igoe will work directly with each client's bank to set-up and test direct deposit reimbursement for Flex
Participants
Positive Pay Files
$100.00
Igoe will create a positive pay data feed built on the specifications provided by the client's bank
Payroll Reimbursement Feeds
$100.00
Igoe will work with the client and their payroll vendor (if applicable) to create a custom data feed for
PER SET-UP
payroll reimbursement. By using a data feed, the client will eliminate the need for manual key entry
when reimbursing through payroll
Non -Discrimination Re -Testing (125 Plans)
$125.00
Applies when retesting is required due to client not providing requested data at Open Enrollment, or
PER RETEST
anytime during the year when the client requests the Plan(s) to be retested
Flex Benefits Card Set -Up
$250.00
If client implements the Flex Benefits Card at any time.
Flex Benefits Card Reactivation
$25.00
A Flex Benefits Card may become de -activated if an employee does not comply with Flex Benefits
PER CARD
Card requirements and reactivation of card may be requested
PER REACTIVATION
Flex Benefits Card Replacement
$5.00.
Applies when a Flex Benefits Card is lost or stolen & client requests replacement card
PER CARD PER REPLACEMENT
WebEX
ADDITIONAL FEES MAY APPLY, PLEASE
Professionally trained Igoe staff members are available by appointment to conduct a live, Interactive
CONTACT YOUR ACCOUNT MANAGER TO
enrollment/client education/ or participant education meeting via the internet. The length of the call
OBTAIN A QUOTE
and the number of connections included determine the fees for this service.
Flex Plan Document Amendments/Restatements
$150.00
Applies when a Plan Document Amendment is necessary to keep your Plan in compliance due to a
PER AMENDMENT/RESTATEMENT
Plan change
EXHIBIT B: ADMINISTRATIVE SERVICES
ON -GOING ADMINISTRATIVE SERVICES
The following services are included in the administration fees.
4v1ewOnline Employer Access To Documents and Reports
The `i�r®w site allows you to view all customized forms, reports and documentation regarding your Flex Plan. Access
to this site will be restricted by 128-bit encrypted super -certificate from Thawte to ensure the strongest possible online
security. Your Account Manager will provide a demonstration of this site upon implementation.
24-Hour On -Line Participant Account Information
Participants are given online access with abilities to check account balance and transaction information via the Igoe
Administrative Services web site at www.goigoe.com. Upon enrollment for each new Plan year, all website login
information will be provided to you for distribution.
Participant Services
Igoe Administrative Services Participant Services Department is comprised of a team of qualified personnel available to
assist Participants by answering questions and resolving issues that may arise during the Open Enrollment Period and
throughout the Plan Year. The Participant Services Team is trained to respond to Participant issues such as: account
balance inquiries; contributions, reimbursements, requests posted to Participant accounts; questions on denied requests
for which a Participant has received a letter; education regarding eligibility of expenses; confirmation of processing
deadlines or reimbursement methods; and IRS Guidelines and Section 125 regulations.
Annual Non-discrimination Testing (When Required for 125 Plans)
Non-discrimination Testing will begin uponreceipt of participant Enrollment Forms, elections and required IRS Non-
discrimination information. Three separate tests will be conducted following each Open Enrollment Period to ensure that
your Plan is in compliance with IRS Non-discrimination requirements, as follows:
25% Concentration Test: Testing is required to confirm that no more than 25% of the total benefit is
contributed by key employees.
55% Average Benefit Test: Testing is required to confirm that more than 55% of the average DCAP benefit
is contributed by non -highly compensated employees:
5% Owner Benefits Test: Testing is required to confirm that no more than 25% of the total DCAP benefit is
contributed by 5% owners of the firm.
Standard Reporting Services
♦ Provide reimbursement register or reimbursement report to coincide with processing schedule
Provide monthly management report
1/17/2008 Al]MINISTRATIVE SERVICES
♦ Provide annual IRS Form 5500 Reporting, if applicable
Ongoing Education
Through the Igoe Administrative Services web site: www.goigoe.com, Administrators, Participants and those interested
may access:
Rules and Regulations governing IRS Section 125 Flexible Benefit Plans
Updated publications provided by the Internal Revenue Services (IRS)
♦ Links to the internal Revenue Service (IRS)
♦ Frequently asked Questions with Answers
In addition, the viewer may download, free of charge:
♦ Medical Care Reimbursement Plan Worksheets
Dependent Care Assistance Plan Worksheets
Medical Reimbursement Plan Request Forms
♦ Dependent Care Assistance Plan Request Forms
♦ Dependent Care vs. Tax Credit Worksheet
Sample Childcare Provider Receipt
Enrollment Materials
A Master set of Enrollment Materials are created by Igoe Administrative Services prior to each Open Enrollment Period
and forwarded to your firm via e-mail at no charge.
(-Ark-
IGOE
V1712008 Awmk 5'fAA71VE SERVECES
4305 Santa Fe Avenue, Vernon, California 90058
Telephone (323) 583-8811
July 15, 2008
IGOE & Company, Inc.
Attn: Michael C. Igoe
President & CEO
16769 Bernardo Center Drive, Suite 21
San Diego, CA 92128-2548
Re: Flexible Benefit Plan Administrative Services Agreement
Dear Mr. Igoe:
Transmitted herewith is a copy of the fully executed agreement as
referenced above, approved by City Council on April 7, 2008, through
Resolution No. 9587.
If you have any questions regarding this matter, please call Mr.
Willard Yamaguchi, at (323) 583-8811 ext. 175.
Very truly yours,
Nelly G r n
City Clerk
NG:dr
c: Willard Yamaguchi
Resolution No. 9587
Agreement No. 08-036
E)(cCusiveCy Industrid
City of Vernon Flexible Benefit Plan
Administrative Services Agreement
This Agreement specifies the services to be provided to City of Vernon, in the ongoing administration of the City of
Vernon Flexible Benefit Plan (the "Plan"/"Covered Entity") as well as the specified responsibilities of City of Vernon
(the "Plan Administratoff'Plan Sponsor") and Igoe & Company Incorporated, dba Igoe Administrative Services (the
"Contract Administrative Firm"/"Business Associate"). The Contract Administrative Firm ("Business Associate") shall be
engaged by the Plan Administrator/Plan Sponsor as a subcontractor in the performance of administrative services for the
Plan.
In accordance with the terms of this Agreement, the Contract Administrative Firm shall have the following
responsibilities:
A. The Contract Administrative Firm shall provide Flexible Benefit Plan services in accordance with this
Agreement, as requested by the Plan Administrator/Plan Sponsor in connection with the Plan.
B. The Contract Administrative Firm shall consult with Plan Administrator/Plan Sponsor on the design of the
Plan.
C. The Contract Administrative Firm shall provide the Plan Administrator/Plan Sponsor with the following
sample documentation in order to initiate the administrative function:
(i) A sample Plan Document for review, and potential adoption by Plan Sponsor and Plan Sponsor's
legal counsel;
(ii) A master set of Employee Communication/Enrollment Materials, including:
a. A Summary Plan Description; and
b. Election Forms to be used during the Enrollment Process; and
C. Reimbursement Request Forms; and
d. Instructions for filing claims for reimbursement and appeals procedures.
The Plan Sponsor is not required to adopt or utilize the sample Plan Documents, Enrollment Materials or
Forms provided by the Contract Administrative Firm and may use its own forms, subject to review by the
Contract Administrative Firm. Contract Administrative Firm makes no warranties, or representations
regarding the adequacy of such documentation. Additional fees may apply if additional work is required
to process enrollments or reimbursements if the forms submitted by the Plan Administrator/Plan Sponsor
do not comply with the Contract Administrative Firm's requirements.
D. At the request of the Plan Administrator/Plan Sponsor, the Contract Administrative Firm shall conduct
enrollment meetings to explain the Plan to employees. Additional fees will apply for this service
(including travel expenses), based on the rates outlined in Exhibit A of this Agreement.
E. Process Reimbursement Requests, including determining the eligibility of expenses which qualify for
reimbursement; provide an explanation in a written format for any expenses submitted which do not
qualify for reimbursement under IRS regulations; provide instructions to participants for re -submitting
requests in instances where required information may be missing. In the event of an appeal by a
participant, the Contract Administrative Firm agrees to reimburse expenses based on final claims
approval provided by the Plan Administrator/Plan Sponsor.
The Contract Administrative Firm will use the Plan Administrator/Plan Sponsor's Flexible Benefit Plan
44it"Ac
111712008 AI]MINISIRA'TIVE SERVILE5
checking account or make other arrangements with such employer, as so directed by the Plan
Administrator/Plan Sponsor, in order to process participant reimbursements.
G. Provide a check register or similar report to the Plan Administrator/Plan Sponsor for all transactions
posted during each processing period.
H. Conduct Non-discrimination testing on the 125 Plan(s), based on information provided by the Plan
Administrator/Plan Sponsor, and provide Plan Administrator/Plan Sponsor with a written interpretation
following each open enrollment period.
Provide a contribution worksheet for Plan Administrator/Plan Sponsor to reconcile payroll contribution
amounts to be redirected into the Flexible Benefit Plan prior to each payroll period.
Provide sample forms for the Plan Administrator/Plan Sponsor to communicate participant terminations
and qualifying change in status events to the Contract Administrative Firm.
K. Provide a year-to-date report of account balances, reimbursements paid, and scheduled payroll
contributions amounts for all participants enrolled in the Flexible Spending Accounts for each month.
L. Provide preparation of IRS Form 5500, if applicable, following the close of each Plan Year.
M. The Contract Administrative Firm will attend any audit or hearing held by a government agency or bureau
regarding compliance issues directly pertaining to administration services performed by Contract
Administrative Firm during the term of this Agreement and will provide any and all requested documents
in their possession. This provision will survive the expiration or termination of this Agreement.
2. Business Associate Contract Provisions:
A. For purposes of this Agreement, the Contract Administrative Firm, Igoe & Company Incorporated dba
Igoe Administrative Services means the `Business Associate" and the City of Vernon Flexible
Benefit Plan means the "Covered Entity". All definitions referred to in the Business Associate Contract
Provisions of this Agreement shall have the same meaning as those described in 45 CFR §§ 160.103,
164.103, 164.304 and 164.501.
B. Obligations and Activities of Business Associate in accordance with HIPAA regulations regarding
Protected Health Information (PHI) and Electronic Protected Health Information (EPHI):
(i) Business Associate agrees to not use or further disclose Protected Health Information other than
as permitted or required by the Agreement or as required by law.
(ii) Business Associate agrees to use appropriate safeguards to prevent use or disclosure of the
Protected Health Information other than as provided for by this Agreement.
(iii) Business Associate agrees to mitigate, to the extent practicable, any harmful effect that is known
to Business Associate of a use or disclosure of Protected Health Information by Business
Associate in violation of the requirements of this Agreement.
(iv) Business Associate agrees to report to Covered Entity any use or disclosure of the Protected
Health Information not provided for by this Agreement for which it becomes aware.
(v) Business Associate agrees to ensure that any agent, including a subcontractor, to whom it pro-
vides Protected Health Information received from, created or received by Business Associate on
behalf of Covered Entity agrees to the same restrictions and conditions that apply through this
Agreement to Business Associate with respect to such information.
4`i�i"J=
111712008 AUMINHiMA'I WE SERVICES
(vi) Business Associate agrees to make internal practices, books, and records relating to the use and
disclosure of Protected Health Information received from, or created or. received by Business
Associate on behalf of, Covered Entity available to the Covered Entity, or at the request of the
Covered Entity to the Secretary, in a time and manner designated by the Covered Entity or the
Secretary, for purposes of the Secretary determining Covered Entity's compliance with the
Privacy Rule.
(vii) Business Associate agrees to document such disclosures of Protected Health Information and in-
formation related to such disclosures as would be required for Covered Entity to respond to a
request by an Individual for an accounting of disclosures of Protected Health Information in
accordance with 45 CFR §164.528.
(viii) Business Associate agrees to implement any and all administrative, technical and physical
safeguards necessary to reasonably and appropriately protect the confidentiality, integrity and
availability of electronic Protected Health Information that it creates, receives, maintains or
transmits on behalf of Covered Entity.
(ix) Business Associate agrees to ensure that access to Electronic Protected Health Information
related to the Covered Entity is limited to those workforce members who require such access
because of their role or function.
(x) Business Associate agrees to implement safeguards to prevent its workforce members who are
not authorized to have access to such Electronic Protected Health Information from obtaining
access and to otherwise ensure compliance by its workforce with the Security Rule.
(xi) Business Associate agrees to ensure that any agent, including a subcontractor, to whom it
provides Electronic Protected Health Information ('ePHI") received from, or created or received
by Business Associate on behalf of, Covered Entity agrees to implement appropriate safeguards
to protect the ePHI.
(xii) Business Associate agrees to report to Covered Entity, in writing, any security incident of which it
becomes aware. Security incident shall mean successful unauthorized access to, disclosure,
modification or destruction of, or interference with, the Electronic Protected Health Information by
a third party. In such instances, Business Associate shall identify: the date of the security
incident, the scope of the security incident, the Business Associate's response to the security
incident and the identification of the party responsible for causing the security incident, if known.
(xiii) Upon request from Covered Entity, Business Associate agrees to provide information to Covered
Entity on unsuccessful unauthorized access, use, disclosure, modification or destruction of the
Electronic Protected Health Information to the extent such information is available to Business
Associate. Business Associate reserves the right to provide such information on a monthly basis
as an aggregate number.
(xiv) As required by the Security Rule, Business Associate agrees to treat a material breach of this
Agreement as a breach of the Agreement and to an early termination of the Agreement by
Covered Entity.
C. Permitted Uses and Disclosures by Business Associate
Except as otherwise limited in this Agreement, Business Associate may use or disclose Protected Health
Information to perform functions, activities, or services for, or on behalf of, Covered Entity as specified in
this Agreement, provided that such use or disclosure would not violate the Privacy Rule if done by
Covered Entity.
3. The Contract Administrative Firm is willing to perform the services described in this Agreement, provided that
Contract Administrative Firm shall not assume the responsibilities of the Plan Administrator/Plan Sponsor under
the Plan, and provided that Contract Administrative Firm shall not constitute or be deemed or construed to
(IGOE
111712008 AUMIN151RATNG 5ERVILEb
constitute the "Plan Administrator" of the Plan as such term is defined in the Plan and within the meaning of
ERISA Section 3(16). The Contract Administrative Firm will use reasonable care and due diligence in the
performance of its responsibilities hereunder. In addition, except as expressly set, forth herein, the Contract
Administrative Firm shall not be a "fiduciary" of the Plan as such term is defined in ERISA Section 3(21). Plan
Administrator/Plan Sponsor agrees that this responsibility is, and remains, that of the Plan Administrator/Plan
Sponsor.
4. In accordance with the terms and conditions of this Agreement, the Plan Administrator/Plan Sponsor agrees to
the following:
A. The Plan Administrator/Plan Sponsor desires to engage the Contract Administrative Firm to provide
professional services in accordance with this Agreement, and the Contract Administrative Firm desires to
accept such engagement.
B. The Plan Administrator/Plan Sponsor shall administer the Plan or appoint a person or committee to
administer the Plan (the "Plan Administrator").
C. The Plan Administrator/Plan Sponsor understands and acknowledges that Contract Administrative Firm is
responsible only for providing the services specifically allocated to the Contract Administrative Firm in this
Agreement.
D. If using a vendor for electronic enrollment for your group health benefits, the Plan Sponsor/Plan
Administrator shall remain ultimately responsible for the accuracy of the Flexible Benefit Plan elections
and all related records. The Plan Sponsor/Plan Administrator is responsible for capturing all electronic
enrollment data and transmitting it to the Contract Plan Administrator prig[ to the appropriate effective
dates. The Plan Sponsor/Plan Administrator to review such reports and to provide corrections as
needed. The Contract Plan Administrator will continue to provide all reporting as outlined in this
Agreement.
E. The Plan Administrator/Plan Sponsor agrees to have the specimen Plan Documents provided by the
Contract Administrative Firm reviewed and approved by the Plan Sponsor's legal counsel. Upon this
review, the Plan Administrator /Plan Sponsor agrees to supply the executed Plan Documents for review
by participants upon request within a reasonable amount of time. In addition, the Plan
Administrator/Plan Sponsor agrees to provide a Summary Plan Description to each participant upon
enrollment in the Plan and to communicate any changes which may be made to the Plan and/or the
Summary Plan Description accordingly.
F. The Plan Administrator/Plan Sponsor shall establish a zero -balance Flexible Benefit Plan checking
account or make other arrangements with such employer in order for the Contract Administrative Firm to
process claims for reimbursement under the Plan.
G. The Plan Administrator/Plan Sponsor shall report all participant terminations and all qualifying change in
status events in a written format, including all requested information, to the Contract Administrative Firm
prior to the first affected payroll date. Should this information not be provided in a complete or timely
manner, the Plan Administrator/Plan Sponsor agrees to pay any resulting administrative fees which may
be incurred in order to process retroactive adjustments to payroll contributions or reimbursement claims
processed in error.
H. The Plan Administrator/Plan Sponsor shall provide the Contract Administrative Firm, confirmation of
redirections into the Flexible Benefit Plan, based on reports provided by the Contract Plan Administrative
(A_FO6__0E
111712008 AUMINISIRA'TIVE 5ERVICE5
Firm, in a timely manner, thus allowing the Contract Administrative Firm to post contributions for the
purpose of processing reimbursements. Should this information not be received in a complete and timely
manner, the Plan Administrator/Plan Sponsor agrees to pay any resulting administrative fees required to
process any retroactive changes, as fees for this service are not covered under this Agreement.
The Plan Administrator/Plan Sponsor agrees to provide to the Contract Administrative Firm, upon each
open enrollment period and with each new enrollment in the Plan, all required data to perform IRS -
required 125 Plan Non-discrimination Testing, The Plan Administrator/Plan Sponsor agrees to report any
changes to the Contract Administrator, which may affect the qualification of the Plan for meeting Non-
discrimination requirements. In addition, the Plan Administrator/Plan Sponsor agrees to initiate any
action required in the event the Plan is reported as discriminatory.
The Plan Administrator/Plan Sponsor shall retain documentation relating to Plan operations that may be
requested in an IRS or Department of Labor audit of Plan operations - including, but not limited to: Non-
discrimination testing information, executed copies of the Plan, Salary Redirection Agreements
("Enrollment Forms"), Plan Amendments, Resolutions adopting the Plan, and Form 5500s, (if applicable),
for seven years after the close of each Plan Year.
K. The Plan Administrator/Plan Sponsor shall ensure that only common law employees participate in the
Plan [employees of companies described in IRC Section 414 (b), (c) or (m) and listed in the Plan as
participating affiliates may also participate] and to ensure that the terms of its Plan Document are
properly enforced.
L. The Plan Administrator/Plan Sponsor shall provide all requested information on a timely basis for Igoe
Administrative Services to file an annual Form 5500 Return, if applicable, for the cafeteria plan within
seven months following the close of each plan year. In addition, the Plan Sponsor may be required to
provide requested information in order for Igoe Administrative Services to file Form 5500 Annual Returns
for the component benefit plans offered through the cafeteria plan, (component benefit plans would be a
multiple plan including Premium Conversion Plans, Dependent Care FSA and/or Medical FSA).
M. The Plan Administrator/Plan Sponsor shall provide the required information on a timely basis in order for
Igoe Administrative Services to perform Non-discrimination testing required by the Internal Revenue
Code for 125 Plan(s) (including, but not limited to: ensuring that a non-discriminatory classification of
employees is eligible for the plan, that contributions and benefits do not discriminate in favor of highly
compensated employees, and that no more than 25% of the total pre-tax benefits is received by officers
and owners). Additional information may be required in order for Igoe Administrative Services to conduct
Nondiscrimination testing for the component benefits offered through the cafeteria plan (including
insurance and flexible spending account benefits). Igoe Administrative Services will perform Non-
discrimination testing shortly after enrollment.
N. At each month -end the Contract Administrative Firm will submit a statement showing the amount of fees
for that month pursuant to Exhibit A. The Plan Administrator/Plan Sponsor will pay the Contract
Administrative Firm the full amount within 10 days of receipt of the statement.
0. (If Applicable) — If a Flex Plan participant uses his/her Flex benefits card for a transaction that falls
outside of the benefits card parameters set forth by the IRS, a request for substantiation will be sent
automatically via e-mail. If no response is received within 14 days a second electronic letter will be sent.
If no response is received within 7 days, the benefits card will be deactivated and the expense deemed
ineligible.
( ki-W10i Gil- - I " A z
111712008 AOMINISTHAUVL 5MVILL=5
Once a card is deactivated, the participant will no longer have the ability to use their card until he/she
provides resolution through one of the following methods. In either case the employer will be charged
$25.00 per reactivation (this fee may be passed to the plan participant at the employer's discretion):
• Provide receipts as substantiation to Igoe Administrative Services along with a copy of the letter
he/she received. The information may be faxed to 858-777-5424. Upon receipt, the transaction will
be adjudicated therefore reactivating the benefits card. The employer will be charged $25.00 per
reactivation.
• Refund the Flexible Benefit Plan equal to the amount of the transaction via either a payroll deduction
or a personal check. Upon notification from the employer that the refund is complete, the transaction
will be reversed therefore reactivating the benefits card. The employer will be charged $25.00 per
reactivation.
The employer may add the amount of the ineligible transaction to the employee's W-2 as taxable
income. Upon notification from the employer that this action is being taken, the transaction will be
adjudicated therefore reactivating the benefits card. The employer will be charged $25.00 per
reactivation.
5. Obligations of Covered Entity in accordance with HIPAA regulations regarding Protected Health Information
(PHI):
A. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of Protected
Health Information that Covered Entity has agreed to in accordance with 45 CFR 164.522, to the extent
that such restriction may affect Business Associate's use or disclosure of Protected Health Information.
B. Covered Entity shall not request Business Associate to use or disclose Protected Health Information in
any manner that would not be permissible under the Privacy Rule if done by Covered Entity.
6. Plan Administrator/Plan Sponsor acknowledges that they have read this Agreement in its entirety and Plan
Administrator/Plan Sponsor acknowledges that it has been advised to consult with, and has consulted as it deems
necessary, its own attorney with respect to the matters herein, and acknowledges that Contract Administrative
Firm is not providing any tax or legal advice as a result of its professional services under this Agreement. In
addition, the Plan Administrator/Plan Sponsor agrees to the fees outlined in Exhibit A and Exhibit B of this
Agreement. Failure to pay fees when due may result in termination of this Agreement. The Administrative Fee
Schedule, which is attached to this Agreement as Exhibit A, is made a part hereof as of the effective date of this
Agreement.
7. Should either party institute legal action to enforce its rights under this Agreement, the venue shall be in San
Diego County, State of California, and the prevailing party in such action shall be entitled to recover reasonable
attorney's fees and costs.
8. Should Plan Administrator/Plan Sponsor, at any time during the coverage period of this Agreement, file in the
United States for the Debt Relief or Reorganization of any type, all services from the date of the filing forward to
the end of the contract period shall be paid for by cashier's check or money order prior to work being performed
by the Contract Administrative Firm. All other terms and conditions of the contract shall remain in effect.
9. Plan Administrator/Plan Sponsor agrees to accurately complete an administrative instruction/summary form, as
supplied by the Contract Administrative Firm, upon implementation or renewal of the Plan. Plan
Administrator/Plan Sponsor agrees that these forms will provide the basis of the Contract Administrative Firm's
111712008 ADMINISTRATIVE SERVILE-5
administrative actions under this Agreement. Further, Plan Administrator/Plan Sponsor agrees that any changes
to the information supplied on these forms may only be made in writing and are only effective when
acknowledged by the Contract Administrative Firm in writing. Additional fees may be incurred for any retroactive
changes made after the Plan Administrator/Plan Sponsor has agreed to the administration design in writing or for
any changes which may be requested mid -year (after the open enrollment period).
10. Term and Termination.
A. Term. This Agreement shall govern the contract period beginning January 1, 2008 and ending
December 31, 2008, unless terminated earlier by either party at any given time upon thirty (30) days
written notice.
B. The Term of this Agreement shall be effective as of the date of the signature on this Agreement, and, with
respect to HIPAA Privacy Rules, this Agreement shall terminate when all of the Protected Health
Information provided by Covered Entity to Business Associate, or created or received by Business
Associate on behalf of Covered Entity, is destroyed or returned to Covered Entity, or, if it is infeasible to
return or destroy Protected Health Information, protections are extended to such information, in
accordance with the termination provisions in this Section.
C. Termination for Cause. With respect to HIPAA Privacy Rules, upon Covered Entity's knowledge of a
material breach by Business Associate, Covered Entity shall provide an opportunity for Business
Associate to cure the breach or end the violation and terminate this Agreement and the Administrative
Services Agreement if Business Associate does not cure the breach or end the violation within the time
specified by Covered Entity, or immediately terminate this Agreement and the Administrative Services
Agreement sections if Business Associate has breached a material term of this Agreement and cure is
not possible.
D. Effect of Termination.
Except as provided for above with respect to HIPAA Privacy Rules, upon termination of this
Agreement, for any reason, Business Associate shall return or destroy all Protected Health
Information received from Covered Entity, or created or received by Business Associate on
behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the
possession of subcontractors or agents of Business Associate. Business Associate shall retain
no copies of the Protected Health Information.
ii. In the event that Business Associate determines that returning or destroying the Protected Health
Information is infeasible, Business Associate shall provide to Covered Entity notification of the
conditions that make return or destruction infeasible. Upon mutual agreement of the Parties that
return or destruction of Protected Health Information is infeasible, Business Associate shall
extend the protections of this Agreement to such Protected Health Information and limit further
uses and disclosures of such Protected Health Information to those purposes that make the
return or destruction infeasible, for so long as Business Associate maintains such Protected
Health Information.
11. Miscellaneous.
A. Applicable 4aw, This Agreement shall be governed by and construed in accordance with the laws of the
State of California.
111712008 ADMINI5IRACM SERVILG5
B. Assignability. This Agreement and the rights, benefits, privileges, duties and responsibilities of the
parties hereto may not be assigned by any other party hereto without the prior written consent of the
parties hereto.
C. Amendment. In regard to Protected Health Information (PHI), the Parties agree to take such action as is
necessary to amend this Agreement from time to time as is necessary for Covered Entity to comply with
the requirements of the Privacy Rule and the Health Insurance Portability and Accountability Act, Public
Law 104-191.
D. Binding Nature of Agreement. This Agreement is binding upon signature by both parties and shall inure
to the benefit of the heirs, executors, successors and assignors of the parties hereto.
E. Complete Agreement. This Agreement and all accompanying Exhibits constitute the complete
Agreement of the parties regarding its subject matter and replaces and supersedes any prior written or
oral agreement between the parties regarding its subject matter.
F. Confidentiality. The Contract Administrative Firm will maintain the confidentiality of all records and
information obtained in conjunction with the services to be performed hereunder in accordance with
HIPAA Privacy regulations. The information therein shall not be divulged or disclosed or made available
to persons, other than the Plah Sponsor/Plan Administrator, without written approval by the Plan
Sponsor/Plan Administrator or a court of competent jurisdiction. This paragraph will survive the
termination or expiration of the Agreement.
G. Construction and Severability. The captions of this Agreement and its paragraphs and subparagraphs
are for the convenience of the parties only and shall not be taken in account in the construction and
interpretation of this Agreement. The terms of this Agreement are severable; should any portion of this
Agreement be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity or
enforceability of the remainder of this Agreement and this Agreement shall be construed and interpreted
as though such invalid or unenforceable provision was not contained herein.
H. Independent Contractor. The Contract Administrative Firm's relationship with Plan Administrator/Plan
Sponsor is that of independent contractor and nothing in this Agreement shall be construed as creating
the relationship of employer or employee between the Plan Administrator/Plan Sponsor and officers,
employees, or agents of the Contract Administrative Firm or the relationship of a partnership or joint
venture between the parties, as outlined in Section 4 of this Agreement.
Interpretation. In regard to Protected Health Information (PHI), any ambiguity in this Agreement shall be
resolved in favor of a meaning that permits Covered Entity to comply with the Privacy Rule,
J. Modifications. This Agreement may not be modified or amended except by means of written modification
or amendment of this Agreement or their legal successors in interest.
K. Regulatory References. All references in this Agreement to a section in the Privacy Rule means the
section as in effect or as amended, and for which compliance is required under the Health Insurance
Portability and Accountability Act, Public Law 104-191,
L. Survival. The respective rights and obligations of Business Associate under HIPAA Privacy Rules, as
outlined in this Agreement, shall survive the termination or expiration of this Agreement.
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111712008 AUMINI5INA11VE- 5ENVILES
M. Warranties. No representations or warranties have been provided by any party to this Agreement or to
any other party to this Agreement except as specifically set forth in this Agreement.
12. Indemnification of the Contract Administrative Firm ("Business Associate") and the Plan Administrator/Plan
Sponsor ("Covered Entity")
Contract Administrative Firm/Business Associate shall indemnify, defend and hold harmless Plan
Administrator/Plan Sponsor, its affiliates, directors, officers and employees or any of them from any claim,
expense, loss, damage, settlement, judgment, penalty and liability, including reasonable attorneys' fees and court
costs (individually and collectively, "Claims") resulting in any way from or arising out of Contract Administrative
Firm's/Business Associate's performance of or failure to perform this Agreement, including, without limitation,
Claims resulting from or arising out of acts or omissions by Contract Administrative Firm/Business Associate, its
employees, officers, directors, agents, or other individuals who provide services under this Agreement.
Plan Administrator/Plan Sponsor shall indemnify, defend and hold harmless Contract Administrative
Firm/Business Associate, its affiliates directors, officers and employees or any of them from any claim, expense,
loss, damage, settlement, judgment penalty and liability including reasonable attorney's fees and court costs
(individually and collectively, "Claims") resulting in any way from or arising out of Plan Administrator's/Plan
Sponsor's performance of or failure to perform this Agreement, including, without limitation, Claims resulting from
or arising out of acts or omissions by Plan Administrator/Plan Sponsor, its, employees officers, directors, or
agents.
[Signatures Follow on Next Page]
111712008 ACIMINISIHA'TIVE SERVICES
The Parties to the agreement consent and agree to all of the provisions and by their signature cause this
Agreement to become effective as of the date of signature. Remittance of and acceptance of payment for
services hereby binds both parties to this agreement.
ATTEST:
By: �r--
anuela Giro , C ty Clerk
APPROVED AA TO FORM:
Qh� -
Je A. rrison, City Clerk
City of Vernon Flexible Benefit Plan
("Covered Entity")
AND
vy.
XXXXXXXXXXXXXXXXXXXXXXXXXX
Plan Sponsor/Plan Administrator:
City of Vernon
By:
Date:��
Contract Administrative Firm
("Business Associate")
By:
Date: January 17, 2008
111712008 AUMIN1511W IVG SERVICES
EXHIBIT A
EXHIBIT A: ADMINISTRATIVE FEE SCHEDULE
City of Vernon
RATES EFFECTIVE JANUARY 11 2008
MONTHLY ADMINISTRATIVE CHARGES — Flexible Spending Accounts
Monthly Administration Fee: $200.00
ADMINISTRATIVE SERVICES INCLUDED IN ABOVE FEE
The follovuina services are included in the monthly administration fee
Actual Postage Expenses
INCLUDED
Multiple Payroll Cycles
INCLUDED
For example: weekly & bi-weekly, monthly & weekly, etc.
Plan Year End Run Out Period Processing
INCLUDED
Igoe will process Run Out Period reimbursement submittals on a set administrative schedule.
Electronic Enrollment Confirmation
INCLUDED
Igoe Administrative Services will send an enrollment confirmation at the start of the plan year to all plan participants that
provide an e-mail address.
Electronic Plan Year End Reminder Notification
INCLUDED
Igoe Administrative Services will send an reminder notification including run out deadlines to all plan participants that provide
an e-mail address.
OPTIONAL SERVICES
Any services not explicitly outlined in this Agreement may require additional fees, Optional services may include, but are not limited to,
Specialized Reporting, Additional Services, Information Systems Programming or Consultation. Fees for these services will be determined based
on the time required to complete said service and will be agreed to by both parties prior to performance of such services.
ANNUAL RE -ENROLLMENT FEE
Provided Igoe Administrative Services and the client mutually accept future services; Igoe Administrative Services reserves the right to charge an
Annual Enrollment Fee. The client will be provided with a proposal of fees for the new Plan Year no later than 60 days before the end of the
current Plan Year. All fees for services must be paid in full prior to the preparation of any renewal materials. Included services are:
♦ Load -on of all new enrollments and building of new database for each Plan Year
♦ Add new participants after initial set up of Plan
♦ Preparation of new master enrollment materials
The minimum monthly fee will apply when a client chooses not to renew for the next Plan Year and requests Igoe Administrative Services to
administer the Plan Year Run Out Period for the ending Plan Year.
4.. (150E
ADMIN151RAIIVE 5ERVILE5
OPTIONAL ADMINISTRATIVE FEES
The following services are not included in the administration fees. The client will incur additional fees when these
services are required or requested.
Adjustments/Corrections/Changes of Status
$100.00
Fee applies for when additional services are required.
PER HOUR
Examples of additional services: void & re -issue of checks, failed direct deposit, correction of
(BILLED IN %HOUR INCREMENTS, WITH MINIMUM OF %HOUR)
incorrect data submitted on forms, etc.
2.5 Month Grace Period Processing (Extension Period)
$100.00
Igoe Administrative Services will process the up to 2.5 Month Grace Period (formerly known as the
PER MONTH DURING
Extension Period) reimbursement submittals on a set administrative schedule.
GRACE Q MONTH MAX
Special Check Run
$25.00
Checks produced on non-scheduled processing day. Additional fees will apply when client requests
PER SPECIAL RUN
replacement check be generated prior to next scheduled processing day
Direct Deposit Set-up
$100.00
Igoe will work directly with each client's bank to set-up and test direct deposit reimbursement for Flex
Participants
Positive Pay Files
$100.00
Igoe will create a positive pay data feed built on the specifications provided by the client's bank
Payroll. Reimbursement Feeds
$100.00
Igoe will work with the client and their payroll vendor (if applicable) to create a custom data feed for
PER SET-UP
payroll reimbursement. By using a data feed, the client will eliminate the need for manual key entry
when reimbursing through payroll
Non -Discrimination Re -Testing (125 Plans)
$125.00
Applies when retesting is required due to client not providing requested data at Open Enrollment, or
PER RETEST
anytime during the year when the client requests the Plan(s) to be retested
Flex Benefits Card Set -Up
$250.00
If client implements the Flex Benefits Card at any time.
Flex Benefits Card Reactivation
$25.00
A Flex Benefits Card may become de -activated if an employee does not comply with Flex Benefits
PER CARD
Card requirements and reactivation of card may be requested
PER REACTIVATION
Flex Benefits Card Replacement
$5.00
Applies when a Flex Benefits Card is lost or stolen & client requests replacement card
PER CARD PER REPLACEMENT
WebEx
ADDITIONAL FEES MAY APPLY, PLEASE
Professionally trained Igoe staff members are available, by appointment to conduct a live, Interactive
CONTACT YOUR ACCOUNT MANAGER TO
enrollment/client education/ or participant education meeting via the internet. The length of the call
OBTAIN A QUOTE
and the number of connections included determine the fees for this service.
Flex Plan Document Amendments/Restatements
$150.00
Applies when a Plan Document Amendment is necessary to keep your Plan in compliance due to a
PER AMENDMENT/RESTATEMENT
Plan change
111712008 AOMINISIRA-TIVE SERVILES
`�' EXHIBIT B
EXHIBIT B: ADMINISTRATIVE SERVICES
ON -GOING ADMINISTRATIVE SERVICES
The following services are included in the administration fees.
�1M Online Employer Access To Documents and Reports
The <W1161m' site allows you to view all customized forms, reports and documentation regarding your Flex Plan. Access
to this site will be restricted by 128-bit encrypted super -certificate from Thawte to ensure the strongest possible online
security. Your Account Manager will provide a demonstration of this site upon implementation.
24-Hour On -Line Participant Account Information
Participants are given online access with abilities to check account balance and transaction information via the Igoe
Administrative Services web site at www.goigoe.com. Upon enrollment for each new Plan year, all website login
information will be provided to you for distribution.
Participant Services
Igoe Administrative Services Participant Services Department is comprised of a team of qualified personnel available to
assist Participants by answering questions and resolving issues that may arise during the Open Enrollment Period and
throughout the Plan Year. The Participant Services Team is trained to respond to Participant issues such as: account
balance inquiries; contributions, reimbursements, requests posted to Participant accounts; questions on denied requests
for which a Participant has received a letter; education regarding eligibility of expenses; confirmation of processing
deadlines or reimbursement methods; and IRS Guidelines and Section 125 regulations.
Annual Non-discrimination Testing (When Required for 125 Plans)
Non-discrimination Testing will begin upon receipt of participant Enrollment Forms, elections and required IRS Non-
discrimination information. Three separate tests will be conducted following each Open Enrollment Period to ensure that
your Plan is in compliance with IRS Non-discrimination requirements, as follows:
♦ 25% Concentration Test: Testing is required to confirm that no more than 25% of the total benefit is
contributed by key employees.
♦ 55% Average Benefit Test: Testing is required to confirm that more than 55% of the average DCAP benefit
is contributed by non -highly compensated employees.
♦ 5% Owner Benefits Test: Testing is required to confirm that no more than 25% of the total DCAP benefit is
contributed by 5% owners of the firm.
Standard Reporting Services
♦ Provide reimbursement register or reimbursement report to coincide with processing schedule
♦ Provide monthly management report
111712008 AUMINISIRATIVL- SE14VILES
♦ Provide annual IRS Form 5500 Reporting, if applicable
Ongoing Education
Through the Igoe Administrative Services web site: www.goigoe.com, Administrators, Participants and those interested
may access:
♦ Rules and Regulations governing IRS Section 125 Flexible Benefit Plans
♦ Updated publications provided by the Internal Revenue Services (IRS)
♦ finks to the Internal Revenue Service (IRS)
♦ Frequently asked Questions with Answers
In addition, the viewer may download, free of charge:
♦ Medical Care Reimbursement Plan Worksheets
♦ Dependent Care Assistance Plan Worksheets
♦ Medical Reimbursement Plan Request Forms
♦ Dependent Care Assistance Plan Request Forms
♦ Dependent Care vs. Tax Credit Worksheet
♦ Sample Childcare Provider Receipt
Enrollment Materials
A Master set of Enrollment Materials are created by Igoe Administrative Services prior to each Open Enrollment Period
and forwarded to your firm via e-mail at no charge.
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1/17/2008 AUMINISIHAIM 5ERVI[E5