Resolution No. 2010-195RESOLUTION NO. 2010-195
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
FLEXIBLE PLAN ADMINISTRATIVE SERVICE AGREEMENT BY
AND BETWEEN THE CITY OF VERNON AND IGOE
ADMINISTRATIVE SERVICES
WHEREAS, the City of Vernon (the "City") desires to retain
the services of a reputable independent contractor to provide
administrative and clerical services relating to the administration of
its Flexible Benefit Plan; and
WHEREAS, Igoe and Company, doing business as Igoe
Administrative Services ("Igoe"), has provided such services in the
past and therefore can provide the administrative and clerical
services required by the City in a more efficient and effective
manner; and
WHEREAS, in order to ensure the uninterrupted provision of
such services to the City, the Risk Manager has recommended that the
City of Vernon Flexible Benefit Plan Administrative Services Agreement
("Agreement") setting forth the terms and conditions under which Igoe
will perform the services be approved commencing January 1, 2011, and
be reevaluated on an annual basis; and
WHEREAS, the City Council desires to approve the Agreement
and engage the services of Igoe; and
WHEREAS, the City Council of the City of Vernon has
determined that. __..pursua_n_tto the Qrovisions of _subsection() (1) of
Section 2.27 of the Vernon City Code, it is in the public interest and
necessity to enter into the Agreement with Igoe to provide the
administrative and clerical services required by the City in an
efficient and effective manner.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION l: 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 Agreement with Igoe, a copy of which is attached hereto
as Exhibit A.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor or Mayor Pro-Tem to execute the Agreement for,
and on behalf of, the City of Vernon and the City Clerk, or Deputy
City Clerk, is hereby authorized to attest thereto.
SECTION 4: The City Council of the City of Vernon hereby
authorizes the City Administrator, or his designee, to take whatever
actions are deemed necessary and desirable for the purpose of
implementing and carrying out the purpose of this Resolution and the
transactions herein approved or authorized.
SECTION 5: The City Council of the City of Vernon hereby
directs the City Clerk, or the City Clerk's designee, to send a fully
executed Agreement to Igoe.
SECTION 6: The City Clerk of the City of Vernon shall
certify to the passage, approval and adoption of this resolution, and
the City Clerk of the City of Vernon shall cause this resolution and
the City Clerk's certification to be entered in the File of
Resolutions of the Council of this City.
APPROVED AND ADOPTED this 20th day of December, 2010.
ATTEST
%/IK&dM1 =
Name: Hilario Gonzales
Title: Mayor
3
STATE OF"CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, Willard G. Yamaguchi, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution
No. 2010-195, was duly passed, approved and adopted by the City Council
of the City of Vernon at a regular meeting of the City Council duly
held on Monday, December 20, 2010, and thereafter was duly signed by
the Mayor or Mayor Pro-Tem of the City of.Vernon.
Executed this day of December, 2010, at Vernon, California.
Willard 6. OlagLui' City Clerk
(SEAL)
M
EXHIBIT A
'IGOE
AtIMIMSTRAVVE SER"ITS
FSA ADMINISTRATION RENEWAL PACKET
September_30, 2010
Dear Karina,
Igoe's goal for your upcoming renewal is to make this process as simple as possible. Simply complete the
following three steps and we will take care of the rest!
INSTRUCTIONS:
1. Review the information outlined on the attached Client Verification Sheet. If there are no changes,
simply file a copy for your own records. If you wish to make changes to your plan this year, please
return a copy of the following page indicating the changes by December 15Y
2. If no changes are being made to your administration this year, be on the lookout for your renewal
confirmation via email and instructions on how to access your customized enrollment materials. Your
new Administrative Services Agreement follows and has been modified to include updated Business
Associate Agreement (BAA) requirements as outlined in the HITECH act. Additionally, we have updated
the term of the contract so that the contract terms survive the life of our business partnership. It is our
hope that this change will ease your internal processes in the years ahead. Please return a fully
executed copy by December 1'
3. Review Exhibits A - D of the Administrative Services Agreement as these documents contain
explanations of your rate confirmation for this coming plan year, confirmation of participant
reimbursement options, and administrative fee payment options. Igoe will assume that services are
continuing as is and that the included rates are accepted if no response indicating otherwise is provided
by December I". If you wish to make any changes or have questions about these exhibits, please
contact me no later than December 15t. This will allow me the opportunity to assist you and to ensure
that your renewal is finalized by your plan year start date.
If changes are being made, 1 will contact you within 5 business of receiving your written confirmation of plan
design changes to review your requests and communicate the next steps
Please note that a $300 re -enrollment fee will be added to the first administrative invoice forwarded to you
once your renewal is complete.
Feel free to contact me with any questions regarding your FSA renewal process. I am eager to help make
this year's renewal a success!
Warm regards,
Anne -Marie DeWitt
Flex Account Manager / Renewal Specialist
ADMINISTRATIVE SERVICES
Verification of Current Account Information
Company Name: City of Vernon
4305 Santa Fe Avenue, Vernon, CA 90058
(323) 583-8811
Contacts:
Primary Contact: Karina Rueda
Telephone & Email: (323) 583-8811 krueda@ci.vernon.ca.us
Broker Name: Brenda Lee
Broker Co: Gallagher Benefit Services
Telephone & Email: (818) 539-1321; Brenda_Lee@ajg.com
Additional Contacts & Notification Type:
Karina I Rueda krueda@ci.vernon.ca.us X X X X X
Willard Yamaguchi wyamaguchi@ci.vernon.ca.us X X
Martha Valenzuela mvalenzuela@ci.vernon.ca.us X
Judy Lehr jlehr@ci.vernon.ca.us X
Plan Information:
Plan Year: January 1, 2011- December 31, 2011
2.5 Month Grace Period: N/A
Plan Year Run -Out End: 2/29/2012
Termination Run -Out End: 60 days following the date of termination
Eligibility to Participate: ' the first day of the month coincident or following the date of hire
Classification: classified as a full-time employee
Minimum Eligible Hours: N/A
Dependent Annual Maximum: $5,000.00
Medical Annual Maximum: $5,000.00
Limited Purpose FSA: No
Other Insurance Premium Plan: No
Transit / Parking Plan: No/No
Total # of Pay Periods: 26
Paydays: Every Other Thursday
PLEASE PROVIDE A LIST OF ALL PAY DATES THAT WILL HAVE A SALARY REDIRECTION DURING THE UPCOMING PLAN YEAR. THIS LIST IS
REQUIRED IN ORDER TO COMPLETE THE RENEWAL PROCESS.
Reimbursement Processing Method: MICR Checks
Reimbursement Processing Cycle: Every other Thursday (same week as payday)
Current Fees: $5 per participant per month / $200 minimum
Current Participation: 31 active participants
Igoe Administrative Services — FSA Renewal
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 Amended and Restated Flexible Benefit Plan (the "Plan"/"Covered Entity") as well as the
specified responsibilities of City of Vernon (the "Plan Administrator"/"Plan Sponsor") and 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. All terms and conditions
contained within are in full force and are not negotiable.
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. 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. Process Reimbursement Requests, including the provision of written 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
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ADMINI51RATNT 5FRVIUS
Sponsor.
E. The Contract Administrative Firm will use the Plan Administrator/Plan Sponsor's Flexible
Benefit Plan checking account or make other arrangements with such employer, as so
directed by the Plan Administrator/Plan Sponsor, in order to process participant
reimbursements. See Exhibit C. If the benefits card is contracted, the Plan Administrator/Plan
Sponsor will fund that account via ACH transfer directly to the benefits card provider.
F. Provide a check register or similar report to the Plan Administrator/Plan Sponsor for all
transactions posted during each processing period.
G. 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.
H. Provide sample forms for the Plan Administrator/Plan Sponsor to communicate participant
terminations and qualifying change in status events to the Contract Administrative Firm.
I. 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.
J. 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.
K. Except as otherwise specifically set forth herein, the Contract Administrative Firm will retain
hard copy or electronic copies of all records in conjunction with the services to be performed
under this Agreement for seven (7) years or longer if required by applicable state law. If
requested by Plan Administrator/Plan Sponsor, Contract Plan Administrative Firm will deliver
all records and files to Plan Administrator/Plan Sponsor, or representative of Plan
Administrator/Plan Sponsor, within thirty days of such request. Contract Administrative Firm
will be permitted to retain such records at its own expense. The confidentially of all such
records shall be maintained by Contract Administrative Firm -and the information therein shall
not be divulged or disclosed or made available to persons other than Plan Administrator/Plan
Sponsor without the written approval of Plan Administrator/Plan Sponsor or a court of
competent jurisdiction. The provisions of this paragraph will survive the termination of this
Agreement.
2. Business Associate Contract Provisions:
_A. 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,
164.402 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
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(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.
NO 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 provides 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.
NO 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 information 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 (WHI") received from, or
created or received by Business Associate on behalf of, Covered Entity agrees to
implement appropriate safeguards to protect the ePHI.
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NO 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. Obligations and Activities of Business Associate in accordance with Section 13402(b) of the
Health Information Technology for Economic and Clinical Health Act of 2009 (the "HITECH
Act"), and interim final regulations thereunder, as such provisions may be amended from time
to time or finalized.
(i) Business Associate will notify Covered Entity of any breach of unsecured PHI
pertaining to participants or dependents/beneficiaries in Covered Entity's Plan,
occurring on or after September 23, 2009, to the extent such breach becomes known
to Business Associate or would have become known to Business Associate through the
exercise of reasonable diligence. Business Associate will notify Covered Entity without
unreasonable delay and in no case later than 60 days following the discovery of the
breach. "Business Associate" for this limited purpose shall include Business
Associate's owners, officers, employees, and independent contractors, with the
exclusion of any individual responsible for the breach.
(ii) Business Associate will include such notification, to the extent possible, the
identification of each individual whose unsecured PHI has been, or is reasonably
believed to have been accessed, acquired, used or disclosed during the breach.
(iii) Business Associate will include in such notification any other available information that
the Covered Entity is required to include in its notification to the individual pursuant to
45 Code of Federal Regulations § 164.404(c), promptly upon such information
becoming available to Business Associate.
(iv) For purpose of this section, "breach" is as defined at 45 Code of Federal Regulations §
164.402 including the exclusion set forth at §164.402(2).
-(v)---for-purpose-of- is-section,-"unsecured-H1__is a s-defined at--45_-Code-of_F-ed ral
Regulations §164.402.
D. Obligations and Activities of Business Associate in accordance with Section 1798.82 of
California Civil Code
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AUMMIS-MArnE sr-R%'Jcr_s
Except to the extent its obligation to do so is preempted by the provisions of the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA"), including provisions of the
HITECH Act, Business Associate shall notify Covered Entity of any breach of unencrypted
data owned or licensed by Covered Entity, and maintained by Business Associate. "Breach"
for these purposes means acquisition of unencrypted data by an unauthorized person, or
the reasonable belief of such acquisition, that compromises the security, confidentiality, or
integrity or personal information consisting of medical or insurance information pertaining
to California residents, subject however to the good faith exception set forth in Civil Code §
1798.82 (d)
E. Permitted Use and Disclosures by Business Associate
Except as otherwise limited in this Agreement, Business Associate may use or disclose
Protected Health Information to perform its 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 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 2Ek to the appropriate effective dates. The Plan Sponsor/Plan
Administrator is responsible to review such reports and to provide corrections as needed.
The Contract Plan Administrator will continue to provide all reporting as outlined in this
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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 (See Exhibit Q.
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 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.
J. 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)
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A13YtIN15TRATKIF 501VICT_5
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 Contract Administrative Firm 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 Contract
Administrative Firm 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 Contract Administrative Firm 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 Contract Administrative Firm to conduct Non-
discrimination testing for the component benefits offered through the cafeteria plan
(including insurance and flexible spending account benefits). Contract Administrative Firm will
perform Non-discrimination testing shortly after enrollment.
N. By 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. Payments will be considered late
after 30 days (payment options are outlined in Exhibit D). If payment is not made within 30
days, the Contract Administrative firm reserves the right to suspend future services. To
reinstate services, the Plan Administrator/Plan Sponsor must agree to pay the Contract Plan
Administrative Firm via ACH for all future administrative fees, including any applicable
reinstatement fees of $250.00. The Contract Plan Administrative Firm reserves the right to
decline to reinstate services.
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 may
be deactivated and the expense deemed ineligible.
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:
• Provide receipts as substantiation to Igoe Administrative Services along with a copy of the
letter he/she received. Upon receipt, the transaction will be approved therefore
reactivating the benefits card.
• 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
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complete, the transaction will be reversed therefore reactivating the benefits card (if
applicable).
• 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 approved therefore reactivating the benefits card.
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.
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 shall be terminated immediately.
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 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
----whic-- hma0e�-equ,e—sted-mid�yP-ar--(after the-open-enr-0Ilment-p riod).---
10. Term and Termination.
A. Effective Date. The Term of this Agreement shall be effective as of the date of the signature
on this Agreement. -
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AMON15TRATRIV 5MV11-IS
B. Term. This Agreement is effective beginning on the effective date as defined in Section 10A
of this document and shall remain in place and continue to be in full force until one or both
parties request to terminate said contract pursuant to the termination provisions contained in
within this section of the agreement. Administrative Fees set forth in Exhibit A are subject to
annual review by Contract Plan Administrative Firm. Contract Administrative Firm must give
notice to Company regarding any change in fees at least sixty (60) days prior to the rate
effective date defined in Exhibit A. If Company or Igoe Administrative Services does not
desire to renew, the terminating party must give the non -terminating party written notice
thirty (30) days prior to the expiration of this Agreement of their intent not to renew said
Agreement. Upon termination or expiration of this Agreement, upon request of Company,
Contract Administrative Firm will provide electronic copies of the following documents to
Company to aid with transition services: all reimbursement claim records for all participants;
a year to date report regarding account balances, reimbursements paid and scheduled payroll
contribution amounts for all participants enrolled in the Flexible Spending Accounts; and
Protected Health Information.
C. Termination with Respect to HIPAA. 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.
D. 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.
E. 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 the possession of subcontractors or agents of Business
Associate. Business Associate shall retain no copies of the Protected Health
Information. For purposes of this section, "destruction" of unsecured PHI shall comply
with guidelines published on April 27, 2009 by the Department of Health and Human
Services, as modified by the Department in the preamble to interim final regulations
on breach noti if cat on tor unsecured-PH"74—Federa -Register -l-62—(August--24,-2009y,
pp. 42741-42743.
ii. In the event that Business Associate determines that returning or destroying the
Protected Health Information is infeasible, Business Associate shall provide to Covered
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r
At)A111�'IS IRATI1�f: Sfk VICLti
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 dis-
closures 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 Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
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 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 SeverabilitV. 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
Agr--eemem-and -t-h is-Agr-eement--s-hali-be-construed-and-inter-pr-et-e"s-t-hough3uch-invalid-0r---
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
10IPage
ADMIN151RATRT- SFRVIC[5
shall be construed ascreating 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.
I. Interpretation. In regard to Protected Health Information (PHI), any ambiguity in this Agree-
ment 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 and under California Civil Code Section 1798.82, shall
survive the termination or expiration of this Agreement.
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.
Notwithstanding the above, should there be a breach of unsecured PHI by Contract Administrative
Firm/Business Associate, Contract Administrative Firm/Business Associate shall. bear the costs and
expenses for Plan Administrator/Plan Sponsor to comply with notification duties resulting from such
a breach of unsecured PHI set forth in 45 Code Federal Regulations §§164.404, 164.406, and 164.408,
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AGUE
ARMIh I5TRATIVT 5MVIFFS
with regard to Covered Entity, and as set forth in 45 Code of Federal Regulations §164.410, with
regard to Business Associate, and under comparable California law.
121Page
ATAIINisnaAmm
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 Amended and Restated Flexible Benefit Plan
("Covered Entity")
ATTEST:
By:
Willard G. Yamaguchi, City Clerk Date:
APPROVED AS TO FORM:
Willard G. Yamaguchi, Interim Plan Sponsor/Plan Administrator:
City Attorney City of Vernon
By:
Date
Contract Administrative Firm
("Business Associate")
By:
Michael . lgotl/
President/CEO
Date: September 29, 2010
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ADMINJ"- RATIVE SC:1-VI{Y5
EXHIBIT A: ADMINISTRATIVE FEE SCHEDULE
City of Vernon
.RATES EFFECTIVE January 1, 2011
IVIVIV 1 MR-T P%"IVIIIVIJ 1 KH I I V= L.HARUCJ — Hexi ie -Spen ing Accounts
Monthly Administration Fee: $5.00 per participant per month*
*If current plan year covers 40 or fewer active participants, a minimum fee of $200 will be charged
ADMINISTRATIVE SERVICES PROVIDED
Actual Postage Expenses
INCLUDED
Multiple Payroll Cycles
INCLUDED
For example: weekly & bi-weekly, monthly & weekly, etc.
FSA Benefits Card Administration
INCLUDED
Fee includes ongoing administration of the FSA benefits MasterCard and all applicable reporting.
Set-up fee may be charged if benefits MasterCard is not current offered. See Optional Services.
Flex Benefits Card Reactivation (if applicable)
INCLUDED
A Flex Benefits Card may become de -activated if an employee does not comply with Flex
Benefits Card requirements.
Flex Benefits Card Replacement (if applicable)
INCLUDED
Applies when a Flex Benefits Card is lost or stolen & client requests replacement card
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 a reminder notification including run out deadlines to all
plan participants that provide an e-mail address.
Plan Year End Run Out Period Processing
ALL ACTIVE PARTICIPANTS WITH POSITIVE BALANCES DURING
Igoe Administrative Services will process Run Out Period reimbursement submittals on a set
THE RUN -OUT PERIOD WILL BE CHARGED ACCORDING TO THE
-
administrative schedule.
ABOVE FEE SCHEDULE. PARTICIPATION BELOW THE
MINIMUM REQUIREMENT WILL BE WAIVED.
2.5 Month Grace Period Processing.
ALL ACTIVE PARTICIPANTS WITH POSITIVE BALANCES DURING
Igoe Administrative Services will process the up to 2.5 Month Grace Period (formerly known as
THE 2.5 MONTH GRACE PERIOD WILL BE CHARGED
the Extension Period) reimbursement submittals on a set administrative schedule.
ACCORDING TO THE ABOVE FEE SCHEDULE. PARTICIPATION
•
BELOW THE MINIMUM REQUIREMENT WILL BE WAIVED.
Transportation & Parking Account Administration (If applicable)
A MONTHLY SERVICE CHARGE OF $75.00 WILL APPLY FOR,
THE MAINTENANCE OF THE TRANSPORTATION -BENEFIT
THE PER PARTICIPANT FEE WILL BE CHARGED FOR ALL
TRANSPORTATION FRINGE BENEFIT PARTICIPANTS THAT DO
NOT HAVE AN EXISTING FSA ELECTION
Limited Purpose FSA Administration (If applicable)
A MONTHLY SERVICE CHARGE OF $75.00 WILL APPLY FOR
THE MAINTENANCE OF THE LPFSA BENEFIT
-
THE PER PARTICIPANT FEE WILL BE CHARGED FOR ALL LPFSA
PARTICIPANTS THAT DO NOT HAVE AN EXISTING FSA
ELECTION
Non -Discrimination Testing (125 Plans)
INCLUDED
Applies to initial testing following Open Enrollment. Additional fees may apply for retesting mid
plan year (see below Option Services)
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na�tn�tsrt?ATnT sn�vtr.Ls
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
♦ Modifications to specimen plan document and SPD (if applicable)
♦ Initial plan year Non-discrimination testing
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.
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.
Special Check Run
$25.00
Checks produced on non-scheduled processing day. Additional fees will apply when client
PER SPECIAL RUN
requests replacement check be generated prior to next scheduled processing day
Flex Benefits Card Set -Up
$100.00
One-time fee assessed when client implements the Flex Benefits Card.
Direct Deposit Set -Up
$150.00
One-time fee assessed when client implements the direct deposit reimbursement option.
Flex Plan Document Amendments/Restatements
$150.00
Applies when a Plan Document Amendment is necessary to keep your Plan in compliance
and for changes made to specimen documents outside of the FSA renewal period.
WebEx
ADDITIONAL FEES MAY APPLY, PLEASE
Professionally trained Igoe staff members are available by appointment t0 conduct a live,
CONTACT YOUR ACCOUNT MANAGEMENT
interactive enrollment client education/ or participant education meeting via the internet.
TEAM TO OBTAIN A QUOTE
The length of the call and the number of connections included determine the fees for this-
service.
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Ar1MIN15TRATIVE 5mvirts
EXHIBIT B: ADMINISTRATIVE SERVICES
ON -GOING ADMINISTRATIVE SERVICES
The following services are included in the administration fees.
(VIEW ONLINE EMPLOYER ACCESS To DOCUMENTS AND REPORTS
The iView 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 Thowte to ensure the strongest possible online
security. Your Account Management Team 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. Live phone
operators are available Monday - Friday from 8 am to 5 pm PST (excludes holidays).
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.
STANDARDREPDRTING-SERVCCES - - --- —
♦ Provide reimbursement register or reimbursement report to coincide with processing schedule
♦ Provide monthly management report
161Page
ram`
A11MINASIRATAT 5ERVIIlS
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/Dependent Care Assistance Plan Request Forms
♦ Dependent Care vs. Tax Credit Worksheet
♦ Sample Childcare Provider Receipt
ENROLLMENT MATERIALS
A customized set of Enrollment. Materials are created by Igoe Administrative Services prior to each Open Enrollment
Period and accessible via iView at.no charge.
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ADMIN15-TRAT1VI- 5CTIVIr.LS
EXHIBIT C: FSA PARTICIPANT REIMBURSEMENT OPTIONS
The following services are included in the administration fee.
❑ OPTION 1: MANUAL CHECKS FROM PLAN SPONSOR CHECKING ACCOUNT
The Plan Administrator/Plan Sponsor shall establish a zero -balance Flexible Benefit Plan checking account and
authorize Michael C. Igoe as a signer. If -Plan Administrator/Plan Sponsor does not want to -add Michael C. Igoe
as a signer on said account, unsigned checks will be provided directly to the Plan Administrator/Plan Sponsor
for signature and distribution.
❑ OPTION 2: MANUAL CHECKS FROM PLAN SPONSOR CHECKING ACCOUNT PLUS DIRECT DEPOSIT
The Plan Administrator/Plan Sponsor shall establish an account using the instructions listed under, option 1.
The Plan Administrator/Plan Sponsor shall provide a bank contact for Igoe to establish the protocol for Direct
Deposit ACH file formatting and ongoing secure file delivery. A $150.00 implementation fee will apply. Igoe
recommends that the Plan Sponsor/Plan Administrator establish any ongoing fees that may be assessed by
your financial institution prior to contracting this reimbursement method.
❑ OPTION 3: REIMBURSEMENT THROUGH PAYROLL REIMBURSEMENT
The Plan Sponsor/Plan Administrator will maintain all FSA related funds. Igoe Administrative Services will
provide notification directly to the Plan Sponsor/Plan Administrator of all reimbursements to be included on
the Plan Sponsor/Plan Administrator's next scheduled pay date.
❑ BENEFITS CARDS: POINT OF SALE REIMBURSEMENT THROUGH A FLEXIBLE SPENDING BENEFITS CARD
Plan Sponsor/Plan Administrator will provide ACH abilities to FIS/Medibank for the funding of benefit card
transactions only. Page 18 contains the necessary paperwork to establish the ACH connection. This option
must be paired Option 1, 2, or 3 as listed above for non -benefits card transactions.
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AIWIM151RATIVC 501VICLS
EXHIBIT Dt ADMINISTRATIVE FEE PAYMENT OPTIONS*
❑ OPTION 1: FEES DRAWN FROM FLEX FUNDING ACCOUNT FOR MICR CLIENTS ONLY)
If the Plan Administrator/Plan Sponsor establishes a Flexible Benefit Plan checking account and authorizes
Michael C. Igoe as a signer, Igoe Administrative Services will draw funds from this account via check
payment equal to the amount being billed for services provided in the given month. Statements outlining
all service fees will be made available via iView on or about the 20th day of the month. Funds drawn from
said account will be processed on or about the 251h of the month (5 business days after invoice notification
has been made available). A 5% reduction will be applied to all administrative fees incurred should this
option be selected.
❑ OPTION 2: PLAN SPONSOR ACH
The Plan Administrator/Plan Sponsor shall complete attached ACH form. Igoe Administrative Services
will provide a statement outlining all service fees on a monthly basis via' iView on or about the 20th of each
month. Funds will be drawn from the ACH account will be processed on or about the 25th of the month
(5 business days after invoice notification has been made available).
❑ OPTION 3: INVOICE TO PLAN SPONSOR
The Plan Administrator/Plan Sponsor will receive an invoice outlining all service via iView and USPS on or
around the 201h of each month. Payment terms are provided in Section 4N of the Administrative Services
Agreement. Additional invoice processing fees may apply.
* If Client is authorizing a third party to pay administrative fees on their behalf, please contact your IAS
representative to complete all necessary paperwork.
191Page
nnMi��snaTi�� sr.-Fsvirt-s
"IGOE
ADMINISTRATIVE SERVICES
ACH Debit Authorization Agreement
(Payment of Administrative Fees Only)
Please Type or Print Clearly
Client Name (For which debit is referencing):
Debtor Information
Company Name:
Taxpayer Identification Number (TIN):
Company Contact Name for Remittance Only:
Company Contact Telephone Number:
Company Fax Number:
Company Contact e-mail Address:
Igoe Administrative Services authorization number: 2953391660
The above hereby authorizes Igoe Administrative Services to debit payments from the account specified below. Acknowledgement
is made that the origination of ACH transactions to the accounts specified below must comply with the provisions of U.S. law.
Bank Name:
Bank Address:
Bank Routing Number (ABA):
Bank Account #:
(9 digit number)
Checking ❑ Saving ❑
This authorization and direction will be in effect until Igoe Administrative Services is notified in writing of a change or termination of
your financial institution and/or bank account. ACH debit will begin with the next invoice that is issued after this form has been
returned to the Igoe Administrative Services Accounting Department if accurate account and bank transit information has been
provided.
Authorized Contact (Please print) Job Title
Authorized Signature
201Page
Date
------
GUEI
AD"IN'15TR MT, SURViccs
'IGOE
ADMINISTRATIVE SERVICES
ACH AUTHORIZATION RELEASE FOR BENEFITS CARD TRANSACTIONS
HEREBY authorizes mbi*, or mbFs* agent (known as "MoneyMaker"), to initiate ACH (automated
clearing house) transfer entries for the following depository:
(Group/Employer Name): _
Bank Name:
Bank Address:
Bank Routing Number (ABA):
Bank Account #:
(9 digit number)
Checking ❑ Saving ❑
For administrators and employers that use ACH filters, please be sure to make the necessary adjustments listed below. ACH filter are
used to prevent unauthorized debits or credits to a bank account. An ACH filter will only allow ACH transactions that fit a specific set of
criteria to affect bank account balances. These criteria may include the submitting bank name, company name, routing number,
origination ID, and company ID.
M&I BANK FILTER INFORMATION
SUBMITTING BANK (ODFI): M&I BANK
COMPANY NAME (ACCOUNT NAME): MBI
ROUTING NUMBER: 075000051
ORIGINATION ID: 07S00005
COMPANY ID: 1383261866
With this signature, I attest to the understanding that the implementation of this Plan (including all necessary documentation and
administration) will be designed based on the information that is provided on this form. I understand that implementation fees for this
Plan must be paid in full before Igoe Administrative Services can begin preparation of any Open Enrollment Materials, Plan documents,
load -on of Plan information and Enrollee information into Igoe's systems. Should any of the information conveyed on this form change at
any time during the implementation of this Plan or during the term of our contract with Igoe Administrative Services, I understand that I
must notify Igoe immediately and that additional fees may be assessed.
Authorized Contact (Please print) Job Title
Authorized Signature Date
27IPage
-'tea--
• �iJMtT�IS'TRATIIT. Sf-T71+IT1.5
C t-4
December 22, 2010
IGOE Administrative Services
Attn: Michael C. Igoe, President/CEO
15090 Avenue of Science, Suite 201
San Diego, CA 92128
Re: Flexible Plan Administrative Service Agreement
Dear Mr. Igoe:
Transmitted herewith is an original fully executed agreement as referenced above, approved by
City Council on December 20, 2010, through Resolution No. 2010-195.
If you have any questions regarding this matter, please contact me at (323) 583-8811 ext. 175.
VR
rs,
WY AGU I
Cy
WGY:dj
Enclosure
c: Karina Rueda
Resolution No. 2010-195
Agreement No. 10-091
Excfusivefy Industfiaf
,
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 Amended and Restated Flexible Benefit Plan (the "Plan"/"Covered Entity") as well as the
specified responsibilities of City of Vernon (the "Plan Administrator"/"Plan Sponsor") and 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. All terms and conditions
contained within are in full force and are not negotiable.
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. 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. Process Reimbursement Requests, including the provision of written 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
11Page
Sponsor.
E. The Contract Administrative Firm will use the Plan Administrator/Plan Sponsor's Flexible
Benefit Plan checking account or make other arrangements with such employer, as so
directed by the Plan Administrator/Plan Sponsor, in order to process participant
reimbursements. See Exhibit C. If the benefits card is contracted, the Plan Administrator/Plan
Sponsor will fund that account via ACH transfer directly to the benefits card provider.
F. Provide a check register or similar report to the Plan Administrator/Plan Sponsor for all
transactions posted during each processing period.
G. 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.
H. Provide sample forms for the Plan Administrator/Plan Sponsor to communicate participant
terminations and qualifying change in status events to the Contract Administrative Firm.
I. 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.
J. 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.
K. Except as otherwise specifically set forth herein, the Contract Administrative Firm will retain
hard copy or electronic copies of all records in conjunction with the services to be performed
under this Agreement for seven (7) years or longer if required by applicable state law. If
requested by Plan Administrator/Plan Sponsor, Contract Plan Administrative Firm will deliver
all records and files to Plan Administrator/Plan Sponsor, or representative of Plan
Administrator/Plan Sponsor, within thirty days of such request. Contract Administrative Firm
will be permitted to retain such records at its own expense. The confidentially of all such
records shall be maintained by Contract Administrative Firm and the information therein shall
not be divulged or disclosed or made available to persons other than Plan Administrator/Plan
Sponsor without the written approval of Plan Administrator/Plan Sponsor or a court of
competent jurisdiction. The provisions of this paragraph will survive the termination of this
Agreement.
2. Business Associate Contract Provisions:
A. 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,
164.402 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 provides 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.
(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 information 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 (WHI") received from, or
created or received by Business Associate on behalf of, Covered Entity agrees to
implement appropriate safeguards to protect the ePHI.
31Page
rxa�ar�Y���'ri .fit%Ver q�::
(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. Obligations and Activities of Business Associate in accordance with Section 13402(b) of the
Health Information Technology for Economic and Clinical Health Act of 2009 (the "HITECH
Act"), and interim final regulations thereunder, as such provisions may be amended from time
to time or finalized.
(i) Business Associate will notify Covered Entity of any breach of unsecured PHI
pertaining to participants or dependents/beneficiaries in Covered Entity's Plan,
occurring on or after September 23, 2009, to the extent such breach becomes known
to Business Associate or would have become known to Business Associate through the
exercise of reasonable diligence. Business Associate will notify Covered Entity without
unreasonable delay and in no case later than 60 days following the discovery of the
breach. "Business Associate" for this limited purpose shall include Business
Associate's owners, officers, employees, and independent contractors, with the
exclusion of any individual responsible for the breach.
(ii) Business Associate will include such notification, to the extent possible, the
identification of each individual whose unsecured PHI has been, or is reasonably
believed to have been accessed, acquired, used or disclosed during the breach.
(iii) Business Associate will include in such notification any other available information that
the Covered Entity is required to include in its notification to the individual pursuant to
45 Code of Federal Regulations § 164.404(c), promptly upon such information
becoming available to Business Associate.
(iv) For purpose of this section, "breach" is as defined at 45 Code of Federal Regulations §
164.402 including the exclusion set forth at §164.402(2).
(v) For purpose of this section, "unsecured PHI" is as defined at 45 Code of Federal
Regulations §164.402.
D. Obligations and Activities of Business Associate in accordance with Section 1798.82 of
California Civil Code
4 1 P a g e
r
Except to the extent its obligation to do so is preempted by the provisions of the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA"), including provisions of the
HITECH Act, Business Associate shall notify Covered Entity of any breach of unencrypted
data owned or licensed by Covered Entity, and maintained by Business Associate. "Breach"
for these purposes means acquisition of unencrypted data by an unauthorized person, or
the reasonable belief of such acquisition, that compromises the security, confidentiality, or
integrity or personal information consisting of medical or insurance information pertaining
to California residents, subject however to the good faith exception set forth in Civil Code §
1798.82 (d)
E. Permitted Use and Disclosures by Business Associate
Except as otherwise limited in this Agreement, Business Associate may use or disclose
Protected Health Information to perform its 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 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 prior to the appropriate effective dates. The Plan Sponsor/Plan
Administrator is responsible to review such reports and to provide corrections as needed.
The Contract Plan Administrator will continue to provide all reporting as outlined in this
5 1 P a g0
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 (See Exhibit C).
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 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 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)
6 1 P a g e ......... _............... _................................ ........
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 Contract Administrative Firm 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 Contract
Administrative Firm 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 Contract Administrative Firm 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 Contract Administrative Firm to conduct Non-
discrimination testing for the component benefits offered through the cafeteria plan
(including insurance and flexible spending account benefits). Contract Administrative Firm will
perform Non-discrimination testing shortly after enrollment.
N. By 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. Payments will be considered late
after 30 days (payment options are outlined in Exhibit D). If payment is not made within 30
days, the Contract Administrative firm reserves the right to suspend future services. To
reinstate services, the Plan Administrator/Plan Sponsor must agree to pay the Contract Plan
Administrative Firm via ACH for all future administrative fees, including any applicable
reinstatement fees of $250.00. The Contract Plan Administrative Firm reserves the right to
decline to reinstate services.
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 may
be deactivated and the expense deemed ineligible.
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:
• Provide receipts as substantiation to Igoe Administrative Services along with a copy of the
letter he/she received. Upon receipt, the transaction will be approved therefore
reactivating the benefits card.
• 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 (if
applicable).
• 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 approved therefore reactivating the benefits card.
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.
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 shall be terminated immediately.
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 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. Effective Date. The Term of this Agreement shall be effective as of January 1, 2011.
81F'age
itsmi u 4es
B. Term. This Agreement is effective beginning on the effective date as defined in Section 10A
of this document and shall remain in place and continue to be in full force until one or both
parties request to terminate said contract pursuant to the termination provisions contained in
within this section of the agreement. Administrative Fees set forth in Exhibit A are subject to
annual review by Contract Plan Administrative Firm. Contract Administrative Firm must give
notice to Company regarding any change in fees at least sixty (60) days prior to the rate
effective date defined in Exhibit A. If Company or Igoe Administrative Services does not
desire to renew, the terminating party must give the non -terminating party written notice
thirty (30) days prior to the expiration of this Agreement of their intent not to renew said
Agreement. Upon termination or expiration of this Agreement, upon request of Company,
Contract Administrative Firm will provide electronic copies of the following documents to
Company to aid with transition services: all reimbursement claim records for all participants;
a year to date report regarding account balances, reimbursements paid and scheduled payroll
contribution amounts for all participants enrolled in the Flexible Spending Accounts; and
Protected Health Information.
C. Termination with Respect to HIPAA. 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.
D. 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.
E. 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 the possession of subcontractors or agents of Business
Associate. Business Associate shall retain no copies of the Protected Health
Information. For purposes of this section, "destruction" of unsecured PHI shall comply
with guidelines published on April 27, 2009 by the Department of Health and Human
Services, as modified by the Department in the preamble to interim final regulations
on breach notification for unsecured PHI (74 Federal Register 162 (August 24, 2009),
pp. 42741-42743.
ii. In the event that Business Associate determines that returning or destroying the
Protected Health Information is infeasible, Business Associate shall provide to Covered
91 Page
......... ............
I1Ni�i�sl �#t�iJ�T. �s�:Vts;3R�Z
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 dis-
closures 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 Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of California.
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 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.
H. Independent Contractor. The Contract Administrative Firm's relationship with Plan
Administrator/Plan Sponsor is that of independent contractor and nothing in this Agreement
101P >
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.
I. Interpretation. In regard to Protected Health Information (PHI), any ambiguity in this Agree-
ment 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 and under California Civil Code Section 1798.82, shall
survive the termination or expiration of this Agreement.
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.
Notwithstanding the above, should there be a breach of unsecured PHI by Contract Administrative
Firm/Business Associate, Contract Administrative Firm/Business Associate shall bear the costs and
expenses for Plan Administrator/Plan Sponsor to comply with notification duties resulting from such
a breach of unsecured PHI set forth in 45 Code Federal Regulations §§164.404, 164.406, and 164.408,
111Page........ .......... ............. ...... .......
with regard to Covered Entity, and as set forth in 45 Code of Federal Regulations §164.410, with
regard to Business Associate, and under comparable California law.
121Page ....................
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.
A ST:
IT ajjrd
APP$,v D AS
illard G. Y
131Pag(,
City of Vernon Amended and Restated Flexible Benefit Plan
("Covered Entity")
Plan Sponsor/Plan Administrator:
�. City of Vernon
ity Clerk
By:
Hilario G zales, Mayor
i, terim Dater
City Attorney
Contract Administrative Firm
(`Business Associate")
By: �7A
Michael Cf. Igo
President/CEO
AMiINIS HIAraW56*1i
EXHIBIT A
EXHIBIT A: ADMINISTRATIVE FEE SCHEDULE
City of Vernon
RATES EFFECTIVE January 1, 2011
AAA►T■ ■■ �/ A raw
IVIVIV 1 17-IILT - %"IVIIIVIJ 1 PCH 1 I V C L r1,FAKC3C, — 1 1eXlgle ,penging Accounts
Monthly Administration Fee: $5.00 per participant per month*
*If current plan year covers 40 or fewer active participants, a minimum fee of $200 will be charged
ADMINISTRATIVE SERVICES PROVIDED
Actual Postage Expenses
INCLUDED
Multiple Payroll Cycles
INCLUDED
For example: weekly & bi-weekly, monthly & weekly, etc.
FSA Benefits Card Administration
INCLUDED
Fee includes ongoing administration of the FSA benefits MasterCard and all applicable reporting.
Set-up fee may be charged if benefits MasterCard is not current offered. See Optional Services.
Flex Benefits Card Reactivation (if applicable)
INCLUDED
A Flex Benefits Card may become de -activated if an employee does not comply with Flex
Benefits Card requirements.
Flex Benefits Card Replacement (if applicable)
INCLUDED
Applies when a Flex Benefits Card is lost or stolen & client requests replacement card
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 a reminder notification including run out deadlines to all
plan participants that provide an e-mail address.
Plan Year End Run Out Period Processing
FALL ACTIVE PARTICIPANTS WITH POSITIVE BALANCES DURING
Igoe Administrative Services will process Run Out Period reimbursement submittals on a set
THE RUN -OUT PERIOD WILL BE CHARGED ACCORDING TO THE
administrative schedule.
ABOVE FEE SCHEDULE. PARTICIPATION BELOW THE
MINIMUM REQUIREMENT WILL BE WAIVED.
2.5 Month Grace Period Processing
ALL ACTIVE PARTICIPANTS WITH POSITIVE BALANCES DURING
Igoe Administrative Services will process the up to 2.5 Month Grace Period (formerly known as
THE 2.5 MONTH GRACE PERIOD WILL BE CHARGED
the Extension Period) reimbursement submittals on a set administrative schedule.
ACCORDING TO THE ABOVE FEE SCHEDULE. PARTICIPATION
BELOW THE MINIMUM REQUIREMENT WILL BE WAIVED.
Transportation & Parking Account Administration (if applicable)
A MONTHLY SERVICE CHARGE OF $75.00 WILL APPLY FOR
THE MAINTENANCE OF THE TRANSPORTATION BENEFIT
THE PER PARTICIPANT FEE WILL BE CHARGED FOR ALL
TRANSPORTATION FRINGE BENEFIT PARTICIPANTS THAT DO
NOT HAVE AN EXISTING FSA ELECTION
Limited Purpose FSA Administration (if applicable)
A MONTHLY SERVICE CHARGE OF $75.00 WILL APPLY FOR
THE MAINTENANCE OF THE LPFSA BENEFIT
THE PER PARTICIPANT FEE WILL BE CHARGED FOR ALL LPFSA
PARTICIPANTS THAT DO NOT HAVE AN EXISTING FSA
ELECTION
Non -Discrimination Testing (125 Plans)
INCLUDED
Applies to initial testing following Open Enrollment. Additional fees may apply for retesting mid
plan year (see below Option Services)
141PaJe _ .........-
Ailt{t9#���{fti't �FwFi�+iUL*
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
♦ Modifications to specimen plan document and SPD (if applicable)
♦ Initial plan year Non-discrimination testing
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.
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.
Special Check Run
$25.00
Checks produced on non-scheduled processing day. Additional fees will apply when client
PER SPECIAL RUN
requests replacement check be generated prior to next scheduled processing day
Flex Benefits Card Set -Up
$100.00
One-time fee assessed when client implements the Flex Benefits Card.
Direct Deposit Set -Up
$150.00
One-time fee assessed when client implements the direct deposit reimbursement option.
Flex Plan Document Amendments/Restatements
$150.00
Applies when a Plan Document Amendment is necessary to keep your Plan in compliance
and for changes made to specimen documents outside of the FSA renewal period.
WebEx
ADDITIONAL FEES MAY APPLY, PLEASE
Professionally trained Igoe staff members are available by appointment to conduct a live,
CONTACT YOUR ACCOUNT MANAGEMENT
Interactive enrollment client education/ or participant education meeting via the internet.
TEAM TO OBTAIN A QUOTE
The length of the call and the number of connections included determine the fees for this
service.
151 P a g e ............... .................
EXHIBIT B
EXHIBIT B: ADMINISTRATIVE SERVICES
ON -GOING ADMINISTRATIVE SERVICES
The following services are included in the administration fees.
IVIEW ONLINE EMPLOYER ACCESS TO DOCUMENTS AND REPORTS
The Mew 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 Management Team 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. Live phone
operators are available Monday— Friday from 8 am to 5 pm PST (excludes holidays).
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
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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/Dependent Care Assistance Plan Request Forms
♦ Dependent Care vs. Tax Credit Worksheet
♦ Sample Childcare Provider Receipt
ENROLLMENT MATERIALS
A customized set of Enrollment Materials are created by Igoe Administrative Services prior to each Open Enrollment
Period and accessible via Mew at no charge.
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EXHIBIT C
EXHIBIT C: FSA PARTICIPANT REIMBURSEMENT OPTIONS
The following services are included in the administration fee.
❑ OPTION 1: MANUAL CHECKS FROM PLAN SPONSOR CHECKING ACCOUNT
The Plan Administrator/Plan Sponsor shall establish a zero -balance Flexible Benefit Plan checking account and
authorize Michael C. Igoe as a signer. If Plan Administrator/Plan Sponsor does not want to add Michael C. Igoe
as a signer on said account, unsigned checks will be provided directly to the Plan Administrator/Plan Sponsor
for signature and distribution.
❑ OPTION 2: MANUAL CHECKS FROM PLAN SPONSOR CHECKING ACCOUNT PLUS DIRECT DEPOSIT
The Plan Administrator/Plan Sponsor shall establish an account using the instructions listed under option 1.
The Plan Administrator/Plan Sponsor shall provide a bank contact for Igoe to establish the protocol for Direct
Deposit ACH file formatting and ongoing secure file delivery. A $150.00 implementation fee will apply. Igoe
recommends that the Plan Sponsor/Plan Administrator establish any ongoing fees that may be assessed by
your financial institution prior to contracting this reimbursement method,
❑ OPTION 3: REIMBURSEMENT THROUGH PAYROLL REIMBURSEMENT
The Plan Sponsor/Plan Administrator will maintain all FSA related funds. Igoe Administrative Services will
provide notification directly to the Plan Sponsor/Plan Administrator of all reimbursements to be included on
the Plan Sponsor/Plan Administrator's next scheduled pay date.
❑ BENEFITS CARDS: POINT OF SALE REIMBURSEMENT THROUGH A FLEXIBLE SPENDING BENEFITS CARD
Plan Sponsor/Plan Administrator will provide ACH abilities to FIS/Medibank for the funding of benefit card
transactions only. Page 18 contains the necessary paperwork to establish the ACH connection. This option
must be paired Option 1, 2, or 3 as listed above for non -benefits card transactions.
_....... ........._ ....... ._. ...........
181�'age
ism
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EXHIBIT D
EXHIBIT D: ADMINISTRATIVE FEE PAYMENT OPTIONS*
❑ OPTION 1: FEES DRAWN FROM FLEX FUNDING ACCOUNT FOR MICR CLIENTS ONLY)
If the Plan Administrator/Plan Sponsor establishes a Flexible Benefit Plan checking account and authorizes
Michael C. Igoe as a signer, Igoe Administrative Services will draw funds from this account via check
payment equal to the amount being billed for services provided in the given month. Statements outlining
all service fees will be made available via iView on or about the 20th day of the month. Funds drawn from
said account will be processed on or about the 25th of the month (5 business days after invoice notification
has been made available). A 5% reduction will be applied to all administrative fees incurred should this
option be selected.
❑ OPTION 2: PLAN SPONSOR ACH
The Plan Administrator/Plan Sponsor shall complete attached ACH form. Igoe Administrative Services
will provide a statement outlining all service fees on a monthly basis via iView on or about the 201h of each
month. Funds will be drawn from the ACH account will be processed on or about the 25th of the month
(5 business days after invoice notification has been made available).
❑ OPTION 3: INVOICE TO PLAN SPONSOR
The Plan Administrator/Plan Sponsor will receive an invoice outlining all service via iView and USPS on or
around the 201h of each month. Payment terms are provided in Section 4N of the Administrative Services
Agreement. Additional invoice processing fees may apply.
* If Client.is authorizing a third party to pay administrative fees on their behalf, please contact your IAS
representative to complete all necessary paperwork.
191 Page
........ _. ........- ......... ... ....... ......
ACH Debit Authorization Agreement
(Payment of Administrative Fees Only)
Please Type or Print Clearly
Client Name (For which debit is referencing):
Debtor Information
Company Name: _
Taxpayer Identification Number (TIN):
Company Contact Name for Remittance Only:
Company Contact Telephone Number:
Company Fax Number:
Company Contact e-mail Address:
Igoe Administrative Services authorization number: 2953391660
The above hereby authorizes Igoe Administrative Services to debit payments from the account specified below. Acknowledgement
is made that the origination of ACH transactions to the accounts specified below must comply with the provisions of U.S, law.
Bank Name:
Bank Address:
Bank Routing Number (ABA): (9 digit number)
Bank Account #: Checking ❑ Saving ❑
This authorization and direction will be in effect until Igoe Administrative Services is notified in writing of a change or termination of
your financial institution and/or bank account. ACH debit will begin with the next invoice that is issued after this form has been
returned to the Igoe Administrative Services Accounting Department if accurate account and bank transit information has been
provided.
Authorized Contact (Please print)
Authorized Signature
2 0 1 P a g e
Job Title
Date
ACH AUTHORIZATION RELEASE FOR BENEFITS CARD TRANSACTIONS
HEREBY authorizes mbi*, or mbFs* agent (known as "MoneyMaker"), to initiate ACH (automated
clearing house) transfer entries for the following depository:
(Group/Employer Name):
Bank Name:
Bank Address:
Bank Routing Number (ABA):
Bank Account #:
(9 digit number)
Checking ❑ Saving ❑
For administrators and employers that use ACH filters, please be sure to make the necessary adjustments listed below. ACH filter are
used to prevent unauthorized debits or credits to a bank account. An ACH filter will only allow ACH transactions that fit a specific set of
criteria to affect bank account balances. These criteria may include the submitting bank name, company name, routing number,
origination ID, and company ID.
M&I BANK FILTER INFORMATION
SUBMITTING BANK (ODFI): M&I BANK
COMPANY NAME (ACCOUNT NAME): MBI
ROUTING NUMBER: 075000051
ORIGINATION ID: 07500005
COMPANY ID: 1383261866
With this signature, I attest to the understanding that the implementation of this Plan (including all necessary documentation and
administration) will be designed based on the information that is provided on this form. I understand that implementation fees for this
Plan must be paid in full before Igoe Administrative Services can begin preparation of any Open Enrollment Materials, Plan documents,
load -on of Plan information and Enrollee information into Igoe's systems. Should any of the information conveyed on this form change at
any time during the implementation of this Plan or during the term of our contract with Igoe Administrative Services, I understand that I
must notify Igoe immediately and that additional fees may be assessed.
Authorized Contact (Please print) Job Title
Authorized Signature Date
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RECEIVED
DEC 1 4 2010
STAFF REPORT CITY CLERK'S Oft, ICE
Risk Management
DATE: December 14, 2010
TO: Honorable Mayor and City Council
FROM: Willard G. Yamaguchi, Risk Manager
RE: Igoe Administrative Services
Flexible Benefit Plan Administrative Services Agreement
Igoe Administrative Services administers the City's Flexible Spending Account for Medical Care
and Dependent Care. The plan allows employees to set aside pre-tax dollars for certain
expenses. Pursuant to IRS regulations, for calendar year 2011, employees can set aside up
$5,000 for Medical Care and up to $5,000 for Dependent Care.
The base monthly fee is $200, plus a $300 re -enrollment fee. The total cost for FY 2009-2010,
was $2,490.00.
Recommendation
It is hereby recommended that the attached Flexible Benefit Plan Administrative Services
Agreement with Igoe Administrative Services be approved effective January 1, 2011, for the
City's administration of the Flexible Spending Account.
WGY/kr
Enclosures