HomeMy WebLinkAbout173-12 RESOLUTIONRESOLUTION NO. 173-12
A RESOLUTION APPROVING A 2013 EMPLOYEE BENEFITS PACKAGE
BE IT RESOLVED BY THE CITY
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of
the 2013 employee benefits package as recommended
Exhibit "A".
COUNCIL
Fayetteville,
in the staff
PASSED and APPROVED this 21st day of August, 2012.
APPROVED:
B
ATTEST:
By:
OF THE CITY OF
Arkansas hereby approves
memorandum attached as
SONDRA E. SMITH, City Clerk/Treasurer
�evi�le
THE CITY OF FAYETTEVILLE, ARKANSAS
HUMAN RESOURCES DIVISION
113 West Mountain
Fayetteville, AR 72701
P (479) 575-8278 F (479) 718-7698
ARKANSAS
www.accessfayetteville.org
TO: Kit Williams, City Attorney
CC: Jason Kelley, Assistant City Attorney
FROM: Missy Leflar, Human Resources Director At2Z
RE: Amendment to Benefits Renewal Resolution from City Council Meeting of August 21, 2012
Per our discussion, I've reviewed the video from the August 21, 2012 City Council meeting. A copy of
the Final Agenda for that meeting is attached. Item #5 under "New Business" was "Proposed Employee
Benefits Renewal: A resolution approving a 2013 employee benefits package."
At that meeting Alderman Petty proposed an amendment. After lengthy discussions, the following
amendment was voted on and approved by the City Council:
"All employees hired January 1, 2013 and later will contribute 18% toward their individual health
insurance and 24% toward their family health insurance. This is applicable to both the Traditional PPO
insurance and the High Deductible insurance."
The above provision was implemented at the City as of January 1st of this year.
Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701
City Council Meeting Page 1 of 2
Mayor Lioneld Jordan
City Attorney Kit Williams
City Clerk Sondra Smith
Final Agenda
City of Fayetteville Arkansas
City Council Meeting
August 21, 2012
Aldermen
Ward 1 Position I — Adella Gray
Ward 1 Position 2 — Brenda Boudreaux
Ward 2 Position I — Mark Kinion
Ward 2 Position 2 — Matthew Petty
Ward 3 Position I — Justin Tennant
Ward 3 Position 2 — Robert Ferrell
Ward 4 Position I — Rhonda Adams
Ward 4 Position 2 — Sarah Lewis
A meeting of the Fayetteville City Council will be held on August 21, 2012 at 6:00 PM in Room 219 of the City Administration Building located at 113 West
Mountain Street, Fayetteville, Arkansas.
Call to Order
Roll Call
Pledge of Allegiance
Mayor's Announcements, Proclamations and Recognitions:
City Council Meeting Presentations, Reports and Discussion Items:
Agenda Additions:
A. Consent:
1. Approval of the August 7, 2012 City Council meeting minutes.
2. 2012-2013 Edward Byrne Memorial Justice Assistance Grants: A resolution authorizing acceptance of the 2012-2013 Edward Byrne Memorial Justice
Assistance Grants in the total amount of$197,333.59.
2012-2013 Edward Byrne Memorial Justice Assistance Grants
Additional: 2012-2013 Edward Byrne Memorial Justice Assistance Grants
3. 2012 Justice Assistance Grant Local Solicitation Award: A resolution authorizing acceptance of a 2012 Justice Assistance Grant Local Solicitation
Award in the amount of $72,707.00 for the Police Department, and approving a budget adjustment.
2012 Justice Assistance Grant Local Solicitation Award
4. Bid #12-57 Williams Tractor: A resolution awarding Bid #12-57 and authorizing the purchase of one (1) round baler from Williams Tractor of
Fayetteville in the total amount of $27,203.00 for use by Wastewater Treatment.
Bid #12-57 Williams Tractor
5. Bid #12-59 Williams Tractor: A resolution awarding Bid #12-59 and authorizing the purchase of two (2) Polaris Rangers with Kimtek transport units
from Williams Tractor of Fayetteville in the total amount of $45,276.00 for use by the Fire Department, and approving a budget adjustment.
Bid #12-59 Williams Tractor
6. Bid #12-63 Hilbilt Sales Corporation -Arkansas: A resolution awarding Bid #12-63 and authorizing the purchase of one (1) end dump trailer from
Hilbilt Sales Corporation -Arkansas in the total amount of $43,361.00 for use by Wastewater Treatment, and approving a budget adjustment.
Bid #12-63 Hilbilt Sales Corporation -Arkansas
7. Bid #12-64 Warrior of Arkansas: A resolution awarding Bid #12-64 and authorizing the purchase of one (1) articulated wheel loader from Warrior of
Arkansas, Inc. in the total amount of $119,950.00 for use by Wastewater Treatment, and approving a budget adjustment.
Bid 412-64 Warrior of Arkansas
8. Solid Waste Agreement Extensions: A resolution approving one (1) year extension agreements with Deffenbaugh Industries, Hog Box and Waste
Management of Northwest Arkansas to haul and dispose of solid waste and recycling in the city.
Solid Waste Aereement Extensions
9. Animal Services Donation Revenue: A resolution approving a budget adjustment in the amount of $14,655.00 representing donation revenue to
Animal Services for the second quarter of 2012.
http://accessfayetteville.granicus. com/GeneratedAgendaViewer.php?view_id=2&clip_id=2... 5/7/2013
City Council Meeting Page 2 of 2
Animal Services Donation Revenue
B. Unfinished Business:
1. Amend §154.03 Private Parties/Zoning Amendment: An ordinance to amend §154.03 Private Parties/Zoning Amendment to clarify the powers of the
Planning Commission and City Council when a property owner seeks rezoning. This ordinance was left on the First reading at the July 17. 2012 City
Council meeting. This ordinance was left on the Second reading at the August 7, 2012 City Council meeting.
Amend §154.03 Private Parties/Zoning Amendment
C. New Business:
L Amerlux Exterior, LLC: An ordinance waiving the requirements of formal competitive bidding and approving an agreement with for the purchase of
seventeen (17) streetlight poles and fixtures manufactured by Dynamic Lighting. Inc. in the total amount of $28,415.93 for installation on downtown
improvement projects along Mountain Street, College Avenue. Center Street. East Avenue and Meadow Street.
Amerlux Exterior. LLC
2. Seven Valley's Construction Co.: A resolution awarding Bid #12-58 and authorizing a contract with Seven Valleys Construction Co., Inc. in the
amount of $1,368,379.00 for construction of water and sewer improvements along State Highway 265 between Joyce Boulevard and Albright Road.
approving a project contingency of $75,000.00 and approving a budget adjustment.
Seven Valley's Construction Co.
3. Sunbridge Villas Subdivision Private Street Acceptance: A resolution accepting dedication of street right-of-way and maintenance responsibility for
streets in the Sunbridge Villas Subdivision from the Sunbridge Villas Property Owners Association, Inc. upon completion of the current private milling
and overlay project to City standards as approved by the City Engineer.
Sunbridge Villas Subdivision Private Street Acceptance
Additional: Sunbridge Villas Subdivision Private Street Acceptance
4. Proposed Employee Benefits Renewal: A resolution approving a 2013 employee benefits package.
Proposed Employee Benefits Renewal
5. RZN 12-4146 (4054 W. Starry Night View/Oakbrooke III PZD): An ordinance rezoning that property described in rezoning petition RZN 12-4146, for
approximately 1.80 acres, located at 4054 and 4076 West Starry Night View and 1907 North Best Friend Lane from R-PZD 09-3439 Oakbrooke II1 to
RSF-8, Residential Single Family, 8 Units Per Acre.
RZN 12-4146 (4054 W. Starry Night View/Oakbrooke III PZD)
6. RZN 12-4164 (1420 N. Garland Ave./Bonds): An ordinance rezoning that property described in rezoning petition RZN 12-4164, for approximately
0.28 acres. located at 1420 North Garland Avenue from RMF -24. Residential Multi -Family. 24 units Per Acre to NS, Neighborhood Services.
RZN 12-4164 (1420 N. Garland Ave./Bonds)
7. RZN 12-4166 (South of Brookbury Crossing & East of Candlewood Developments/Riggins): An ordinance rezoning that property described in
rezoning petition RZN 12-4166, for approximately 20.99 acres, located to the south of Skillern Road from R -A, Residential Agricultural to RSF-0.5
One Half Single -Family Units Per Acre.
RZN 12-4166 (South of Brookbury Crossing & East of Candlewood Developments/Riggins)
8. ADM 12-4171 (Amend UDC Ch. 166: Development): An ordinance amending Title XV: Unified Development Code of the City of Fayetteville
§166.24 to amend the applicability of non-residential design standards.
ADM 12-4171 (Amend UDC Ch. 166: Development)
Announcements:
Ad iournment:
http://accessfayetteville. granicus. com/GeneratedAgendaViewer.php?view_id=2&clip_id=2... 5/7/2013
Missy Leflar
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
8/21/2012
City Council Meeting Date
Agenda Items Only
Human Resources
Division
Action Required:
Chief of Staff
Department
Staff recommends that Council approve renewal of the Datapath and Ace USA contracts at no increased cost to the
City. Staff further recommends that Council approve the City's proposed United Health Care health insurance
changes, as well as the employee wellness incentive premiums as outlined in the accompanying memo.
3,967,200.00
Cost of this request
)0000000(.51 )000(
Account Number
N/A
Project Number
Budgeted Item
X
Category / Project Budget
Citywide
Program Category / Project Name
Citywide
Funds Used to Date Program / Project Category Name
Citywide
Remaining Balance Fund Name
Budget Adjustment Attached
Dep
rtment Director
Date
I=8 -!Z.
Date
Finance and Internal Services Director Date
5f -'5? -1A
Date
Date
Previous Ordinance or Resolution #
Original Contract Date:
Original Contract Number:
08-03-12P03:02 RCVD
Received in City
Clerk's Office
Received in
Mayor's Office
ENT €D
8rZ
Comments:
Revised January 15, 2009
RESOLUTION NO.
A RESOLUTION APPROVING A 2013 EMPLOYEE BENEFITS PACKAGE
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves
the 2013 employee benefits package as recommended in the staff memorandum attached as
Exhibit "A".
PASSED and APPROVED this 21st day of August, 2012.
APPROVED: ATTEST:
By: By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
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City of Fayetteville
PPO Budget Comparison Report - PPO Traditional
1/1/2012 through 12/31/2012
ti
tal `i`
672
679
680
675
0
0
0
0
0
0
0
0
$335,036
$337,174
$337,786
$337,034
$0
$0
$0
$0
$o
$0
$0
$0
$498.57
$496.57
$496.74
$499.31
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$195,167
$175,540
$411,019
$212,141
$0
$0
$o
$0
$0
$0
$0
$0
$44,075
855,469
$62,220
$56,821
$0
$0
$0
$0
$0
$o
$0
$0
$0
$0
$0
$0
$0
$0
$o
$o
$o
$0
80
$0
$239,242
$231,009
$473,239
$268,962
$0
$0
$0
$0
$o
$0
$0
$0
$356.01
$340.22
$695.94
$398.46
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$81,682
$82,203
$82,352
$82,169
$0
$o
$0
$o
$0
$0
$0
$0
$320,924
$313,212
$555,591
$351,131
$0
$0
$o
$0
$o
$0
$0
$0
$477.56
$461.28
$817.05
$520.19
$0.00
$0.00
$0.00
$0.00
$0.00
$0.0o
$0.00
$0.00
$14,112
$23,962
(8217,805)
($14,097)
$0
$o
$o
$0
$0
$0
$0
$0
$21.00
$35.29
($320.30)
($20.88)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
95.79%
92.89%
164.48%
104.18%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
2,706
$1,347,030
$497.79
$993,867
$218,586
$0
$1,212,452
$448.06
$328,406
$1,540,858
$569.42
($193,829)
($71.63)
114.39%
19
Plan Name
Product
Option
Plan Offering
Multiple Option with:
HRA or HSA
Benefits*
Office Copay (PCP/SPC)
Other Copays (IP/ER/UC)
Other
Deductible
Coinsurance
Out -of -Pocket
Pharmacy
Deductible
Coinsurance
Out of Pocket
Enrollment
Employee
Employee + Family
Total
Rates
Employee
Employee + Family
Monthly Cost
Annual Cost
Change from Current
TOTAL PREMIUM COST
SAVINGS OVER ORIGINAL
ORIGINAL PROPOSAL
Option 1: Current
Choice Plus * Insurance
A - Choice Plus
Dual Option
Option(s) 2
No
Network Single/Family.
N/A Per Visit
N/A/N/A/N/A
N/A
$500/1,000
80%
$2,500/4,000
$10/30/50
Out of Network Single/Family
$1,000/2,000
60%
$4,000/8,000
168
401
569
Rates (Bi
Current
led)
Option 2: Current
Choice Plus * Insurance
AA - Choice Plus HSA
Dual Option
Option(s) 1
HSA
Network Single/Family
N/A Per Visit
N/A/N/A/N/A
N/A
$3,000/6,000
100%
$4,000/8,000
Int Med/Rx Ded, $10/35/60
Out of Network Single/Family;
$5,000/10,000
80%
$6,000/12,000
57
55
112
Proposed
$250.86
$664.77
$308,717
$3,704,607
$302.27
$801.00
$371,982
$4,463,788
20.5%
Rates .(Billed)
Proposed
Current.
$153.68
$407.24
$31,158
$373,896
$188.18
$498.66
$38,153
$457,831
22.5%
$4,921,619
REVISED PROPOSAL
Option 3
NEW
Choice Plus * Insurance
New Plan
Dual Option
Option(s) Replaces 1
No
Network Single/Family:.
N/A Per Visit
N/A/N/A/N/A
N/A
$1,000/2,000
80%
$3,000/6,000
$10/30/50
Out of Network Single/Family
$2,000/4,000
70%
$6,000/12,000
168
401
569
Rates (Billed)
Current Proposed
Option 10
NEW
Choice Plus * Insurance
New Plan
Dual Option
Option(s) Replaces 2
HSA
Network Single/Family
N/A Per Visit
N/A/N/A/N/A
N/A
$3,000/$6,000
80%
$4,000/$8,000
Int Med/Rx Ded, $10/35/60
Out of Network Single/Family
$5,000/$10,000
60%
$6,000/$12,000
57
55
112
$281.40
$745.70
$346,301
$4,155,611
12.2%
Rates (Billed):
Current Proposed
$150.07
$397.67
$30,426
$365,110
-2.3%
$4,520,721
$400,898
2013 Health Insurance Summary:
Monthly Premiums: (Employee)
620 - PPO HEALTH INSURANCE - FAMILY
Cost to Employee
(50% Split Cost Increase)
8/4/2012
630 - PPO HEALTH INSURANCE - INDIVIDUAL
660 - HDHP HEALTH SAVINGS - INDIVIDUAL
670 - HDHP HEALTH SAVINGS - FAMILY
620 - PPO HEALTH INSURANCE - FAMILY
410 $ 93.18 $
163 $ 18.42 $
45 $ 10.08 $
50 $ 26.58 $
em
126.96 $ 133.64 $ 140.32
32.01 $ 33.69 $ 35.37
7.87 $ 8.28 $ 8.69
20.71 $ 21.80 $ 22.89
emit,.:.
410 $ 571.59 $ 618.74 $ 612.06 $ 605.38
630 - PPO HEALTH INSURANCE - INDIVIDUAL 163 $ 232.44 $ 249.39 $ 247.71 $ 246.03
660 - HDHP HEALTH SAVINGS - INDIVIDUAL
670 - HDHP HEALTH SAVINGS - FAMILY
45 $ 214.40 $ 213.00 $ 212.59 $ 212.18
50 $ 537.32 $ 533.62 $ 532.53 $ 531.44
620 - PPO HEALTH INSURANCE - FAMILY
410 $ 2,812,200
630 - PPO HEALTH INSURANCE - INDIVIDUAL 163 454,700
660 - HDHP HEALTH SAVINGS - INDIVIDUAL 45 115,800
670 - HDHP HEALTH SAVINGS - FAMILY 50 322,400
TOTAL BUDGET
$ CHANGE FROM 2012
*Includes COF Contribution on the HDHP Plans
mium, : Rremiu
$ 3,044,200 $ 3,011,300 $ 2,978,500
487,800 484,500 481,200
115,000 114,800 114,600
320,200 319,500 318,900
$ 3,705,100
$ 3,967,200 $ 3,930,100 $ 3,893,200
$ 262,100 $ 225,000 $ 188,100
"Initial Proposal"
Impact on City Budget
If Current Employee/Employer 0/0
Were Kept the Same
Health Current New Increase
Plan Cost Cost To The City 0/0
PPO - FAMILY (620) $ 2,812,200 $ 3,388,500 $ 576,300 20%
PPO - INDIVIDUAL (630) 454,700 547,800 93,100 20%
HDHP - INDIVIDUAL (660) 115,800 133,200 17,400 15%
HDHP - FAMILY (670) 322,400 373,700 51,300 16%
$ 3,705,100 $ 4,443,200 $ 738,100 20%
Impact on City Budget
If Increase Divided Equally
Between Employee/Employer
Health Current New Increase
Plan Cost Cost To The City
0/0
PPO - FAMILY (620) $ 2,812,200 $ 3,147,400 $ 335,200 12%
PPO - INDIVIDUAL (630) 454,700 504,900 50,200 11%
HDHP - INDIVIDUAL (660) 115,800 125,100 9,300 8%
HDHP - FAMILY (670) 322,400 349,800 27,400 8%
$ 3,705,100 $ 4,127,200 $ 422,100 11%
"Recommended"
Impact on City Budget
If Current Employee/Employer 0/0
Were Kept the Same
Health Current New Increase
Plan Cost Cost To The City 0/0
PPO - FAMILY (620) $ 2,812,200 $ 3,154,600 $ 342,400 12%
PPO - INDIVIDUAL (630) 454,700 510,000 55,300 12%
HDHP - INDIVIDUAL (660) 115,800 160,300 44,500 38%
HDHP - FAMILY (670) 322,400 309,200 (13,200) -4%
$ 3,705,100 $ 4,134,100 $ 429,000 12%
Impact on City Budget
If Increase Divided Equally
Between Employee/Employer
Health Current New Increase
Plan Cost Cost To The City
0/0
PPO - FAMILY (620) $ 2,812,200 $ 3,044,200 $ 232,000 8%
PPO - INDIVIDUAL (630) 454,700 487,800 33,100 7%
HDHP - INDIVIDUAL (660) 115,800 115,000 (800) -1%
HDHP - FAMILY (670) 322,400 320,200 (2,200) -1%
$ 3,705,100 $ 3,967,200 $ 262,100 7%
le
C. 4
Proposed Employee
THE CITY OF FAYETTEVILLEial
HUMAN RESOUR ES DIVISION
113 West Mountain
Fayetteville, AR 72701
P (479) 575-8278 F (479) 718-7698
ARKANSAS.;
www.acc.e.ssfayetteville.org
CITY COUNCIL AGENDA MEMO
To: Mayor Lioneld Jordan and City Council members
Thru: Don Man, Chief of Staff
From: Missy Leflar, Human Resource Director
Date: August 8, 2012
Subject: Employee benefits renewals
PROPOSAL:
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iuk,6,`$ f"_'" ~''t.
It is proposed that the City Council renew the City's employee benefits for 2013, as more fully described
below. The proposal is made now in order for the employee benefits enrollment process to proceed on time, and
so that City employees may retain what many consider the most positive aspect of their employment with the
City: their benefits.
There are three City paid benefits contracts coming up for renewal for 2013. Two of them are for the
same price as the City currently pays. Staff recommends renewal of these two contracts. The first is with
Datapath Administrative Services for administration of the legally required Section 125 Summary Plan
Description and COBRA Administration services, as well as administration of the employee Flexible Spending
Accounts (medical reimbursement and dependent care reimbursement. The second is with Ace USA for group
Accidental Death & Dismemberment insurance ($25,000 coverage in the event an employee dies in an accident
or loses a limb).
In addition, there are two employee paid benefits contract matters not requiring Council approval, since
the employees pay for these benefits rather than the City. Just for Council's information, one is the Delta
Dental insurance renewal that is occurring (at no rate increase). The other is a change in vision insurance from
AlwaysCare Vision to Superior Vision, which will be a vision product that will cost employees less and will
have better coverage.
The third City paid benefit contract coming for renewal for 2013 is the health insurance. For the last
several years the City's health insurance companies have consistently paid out far more in claims than they have
collected in premiums, resulting in annual losses to them of well over a million dollars each year. Against this
background the City's Benefits Broker, Gallagher Benefits Services, Inc., solicited competitive bids from
several major health insurance carriers. Of those, two came the closest to being the least expensive: Arkansas
Blue Cross Blue Shield and United Health Care.
HISTORY
The City has experience with both insurance companies. It has a long history of having insurance with
Blue Cross for the majority of the last 50+ years. United Health Care is the City's current health insurance
carrier. The City has carried two types of plans with each company: PPO (Traditional) insurance and HDHP
Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701
THE CITY OF FAYETTEVILLE, ARKANSAS
(High Deductible insurance, which is less expensive) from which employees make a choice. The City switched
from Blue Cross to United Health Care as of January 1, 2012 for financial reasons. The coverage and networks'
are not identical but have been, generally speaking, comparable although the pharmacy foimulary (rules on
what is covered for prescriptions) are more stringent and more subject to review with United Health Care than
with the prior provider Blue Cross and Blue Shield of Arkansas. This is part of a strategy to keep phaiinacy
costs down. Health Care Reform laws have changed the way wellness is handled, but the changes in wellness
benefits covered, and amounts paid is caused by Health Care Reform requirements more than by the individual
insurance company's rules on wellness coverage.
There have been some employee complaints about the change from Blue Cross to United Health Care,
and they have predominantly centered around the pharmacy formulary differences (a difference in the insurance
companies' respective pricing contracts with the drug companies) and the wellness coverage (a difference
caused by Health Care Reform laws which will apply regardless of carrier selected). There have likewise been
some employee compliments about the change from Blue Cross to United Health Care from people's whose
drug prices went down instead of up, etc. United Health Care does seem to have better online tools available
for employees, such as an online tool for pricing medications and finding less expensive alternatives.
The two companies were close in the PPO (Traditional) health insurance plan proposals, but were
significantly different with regard to the HDHP (High Deductible) health insurance plan proposals. United
Health Care was much less expensive in that regard. Still, the proposals from both involved increases in the
double digits (well over 20% increases). The City thus sought and received numerous variations of Blue Cross'
and United Health Care's competitive bids. Variables included different deductible configurations, different
pharmacy formularies, etc. After all the variables were studied, United Health Care in the end was the least
expensive, with an increase of 12.2% from current rates on the PPO health insurance and a decrease of -2.3% on
the HDHP health insurance. Staff accordingly recommends that the City continue with United Health Care as
its health insurer.
SCOPE OF COVERAGE CHANGES:
KEEPING THE RATES DOWN FROM DOUBLE DIGIT INCREASES
Even with the City continuing with United Health Care, premiums as a whole will still be going up quite
a bit. They would be in the double digits above the 20% range on the increases but for the City's decision to
make some changes in the deductibles, co-insurance, and co-insurance maximums. Such changes will bring the
premium increases down 8.3% (from the original proposed increase) on the PPO health insurance and down
24.8% (from the original proposed increase) on the HDHP health insurance. Put another way, the lowest
proposal that the City could get, balanced against coverage changes that were acceptable, is an increase of
12.2% from current rates on the PPO health insurance and a decrease of -2.3% on the HDHP health insurance.
Please refer to the attached rate comparison chart.
1 Although the networks have been comparable, the City recently received a letter from Northwest Health System warning of its
intention to drop Blue Cross from its network effective August 19`h. The letter stated there were still negotiations but it portrayed the
event as one that would occur unless negotiations changed things. This would mean that Northwest Medical Center in Springdale and
Willow Creek Women's Clinic would no longer be in the Blue Cross network. A Northwest Health Center representative has stated to
the City that there is no reason to believe it will drop out of the United Health Care network for 2013.
2 Even with the more stringent pharmacy requirements, between January and April of 2012 the health insurance paid out a total of
$218,586 on pharmacy claims on the PPO policy.
Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701
THE CITY OF FAYETTEVILLE, ARKANSAS
In order to get the lowest proposal, the changes to the insurance coverage from current coverage are:
• The PPO deductible will change from $500 for individual coverage to $1,000 for individual coverage.
• The PPO deductible will change from $1,000 for family coverage to $2,000 for family coverage.
• The HDHP co-insurance coverage (coverage after the deductible is met) is changing from 100% to
80%.
• The HDHP family deductible will change back to the non -embedded form the City had under the Blue
Cross policy. This means that all the family members' claims have to add up to the $6,000 deductible
before the co-insurance coverage begins.
• The out-of-pocket maximums (maximum amounts employees can be liable for paying for covered items
in a calendar year's time) increased. Please refer to the attached rate comparison chart.
The above changes together created a savings of $400,898. (Please see attached chart)
The above are the only changes. Other coverages will remain the same. Further, the City will maintain
its contributions into Health Savings Accounts for employees on the High Deductible plan. Employees are able
to use the money from these accounts to pay for medical expenses not paid for by the insurance.
WELLNESS EFFORT INCENTIVES
One set of variations the City carefully examined was a premium structure designed to provide
incentives for employees to take responsibility for their own healthy practices. Statistically, City employees use
health insurance at a much higher rate than the normal industry standard by which insurance companies price
premiums. In other words, City employees as a group use their health insurance at an unusually higher rate than
would be normally expected. Health insurance today is usually quoted to an employer assuming that
employees will use it at the normal 82%-84% utilization rate3. The City's employee utilization rate, however,
far exceeds that with a 114.39% utilization rate after just the first four months of 2012 (see attached chart).
Anything over 100% means that medical payments have exceeded health insurance premiums that were
collected. Obviously premiums will go up when more insurance is being used than is being paid for.
Part of the answer may lie in the results from the City sponsored free health screenings that were
provided on site last Spring for insured employees. Health screenings are one way to catch serious health
problems before they become symptomatic (and more expensive to treat). Of the 685 insured employees
eligible to participate in the free health screenings sponsored by the City, only 207 (30%) elected to do so. Of
those that did, 73.4% were determined to be at risk for being overweight and obese (above the national
average), 62.3% were detelinined to be at risk for high blood pressure, 53.4% were at risk for HDL Cholesterol,
and 14% were at risk for hypertension.
In the past there has been no financial incentive for City employees to take actions to try to stay healthy,
thus reducing the need to use health insurance. In light of soaring health care costs, City employees' extremely
high usage of the health insurance, and the high percentage of City employees who scored as "high risk" on the
3 Generally speaking there is a break even point for insurance companies. The permissible Medical Loss
Ration (MLR) currently typically falls between the 82%-84% range in order for there to be profitability.
Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701
THE CITY OF FAYETTEVILLE, ARKANSAS
health screenings, the City has decided to follow the example set by other employers who are trying to slow the
growth of health insurance premiums by giving financial incentives to stay healthy.
After careful examination of the possibilities, the City has opted to offer a three tier premium system for
its employees to reward those who engage in proactive healthy practices. First, there will be a Regular
insurance premium paid by employees. Second, there will be a Tobacco User's premium that is 5% higher than
the Regular premium, which will be paid by employees who use tobacco or are insuring a dependent who use
tobacco. Third, there will be a Wellness Program Participant discount that is 5% lower than the regular
premium, for employees who participate in the City's Wellness Program. (Note: Employees who use tobacco
and who aren't insuring a dependent who uses tobacco can still get a specially coded regular insurance premium
rate by participating in the City's Wellness Program). A chart demonstrating the three tier premium program is
attached.
It is anticipated that City sponsored wellness program will include a wide variety of activities such as
free health screenings; on site educational meetings where good nutrition, exercise/sports, etc. are introduced or
taught; use of the free City employee gym or other gyms; on site weight watchers meetings or similar type
meetings; various organized employee activities such as walks on Park Trails; and other programs developed in
conjunction with a third party Wellness Program vendor (to be selected via competitive bidding through the
Benefits Broker).
APPORTIONMENT OF THE INCREASES
The City is recommending that employees absorb 50% of the increased dollar costs, as has been the
tradition in many past years. One reason for this is that the employees of Fayetteville pay an unusually small
percentage of health insurance cost (7% of the cost for individual coverage and 14% of the cost for family
coverage) compared to others who work for other governmental employers (see attached comparison chart).
Second, these cost increases are in large part due to increased usage of medical services by employees and their
families, as opposed to the nationwide trend of medical costs going up in general. The employees who get the
Wellness Program Participant discount will obtain it by having their 5% discount covered by the City when it
pays the insurance company.
SUMMARY OF STAFF RECOMMENDATIONS:
Staff recommends that Council approve renewal of the Datapath and Ace USA contracts, so that these
same services will continue at no increased cost to the City.
Staff recommends that Council approve the City's proposed United Health Care health insurance
changes, as outlined above, for 2013. Staff also recommends that Council approve the employee wellness
incentive premiums for 2013 as also outlined above.
BUDGET IMPACT:
These planned items are being budgeted for in the City's 2013 budget, subject to Council approval of the
above. City staff and staff from the City's Benefits Broker, Gallagher Benefits Services, Inc., are available to
answer any questions you may have.
Telecommunications Device for the Deaf TDD (479) 521-1316 113 West Mountain - Fayetteville, AR 72701
Missy Leflar/Don Marr
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
N/A
City Council Meeting Date
Agenda Items Only
Human Resources
Division
Action Required:
kLXYC4In kSa L(O, Svi c
e
si
atte,e},t_
Cia0,1„a tat1-
I13-12_
Chief of Staff
Department
HR request Mayor Jordan's signature on routine Benefits documents -HIPPA Agreements, Protected Health
Information, Carrier Applications - all necessary for the completion of the City Council Approved 2013 Benefits
Program.
No Cost
Cost of this request
Account Number
Project Number
Budgeted Item
Category / Project Budget
No Cost
Program Category / Project Name
Funds Used to Date Program / Project Category Name
Not applicable
Remaining Balance Fund Name
Budget Adjustment Attached
t'u *.
164%
Dartment Director
City Attorney
0-3) 7 Previous Ordinance or Resolution #
Date
Original Contract Date:
eSou.312013 Original Contract Number:
Date
Finance and Internal Services Director Date
Comments:
113-a
Received in City 2^3
Clerk's Office
_P12:34 RC D
Received in
Mayor's Office
Revised January 15, 2009
Request for Group Insurance Amendment
Standard Insurance Company
900 SW Fifth Avenue
Portland, OR 97204-1282
Employee Benefits Consultant: Ryan Herrman
Employee Benefits Service Representative: Sherri Borgmeyer
Employee Benefits Sales and Service Office: Kansas City
Employer Name: City of Fayetteville
Group Number: 148264
As an authorized representative of the Employer, I request that Standard Insurance
Company ("The Standard") amend the above Employer's coverage under the Group
Policy to make the following change(s):
Amend the definition of a Spouse to include Domestic Partners.
I request that the amendment become effective on January 1, 2012. I understand that
the amendment will not become effective unless approved and issued by The Standard.
I request that the amendment be approved by The Standard subject to The Standard's
usual underwriting requirements, including, if applicable, Evidence of Insurability or a
Pre-existing Condition provision.
I understand that the amendment, if approved by The Standard, will be issued in the
policy language customarily used by The Standard.
I understand that any increase in Insurance for a Member who is not Actively At Work
all day on the Member's last regular work day before the scheduled effective date of the
amendment will be deferred until the first day after the Member completes one full day
of Active Work.
I request that the amendment, if approved and issued by The Standard, become
effective by its terms without any further acceptance by the Employer, and that a copy
of this Request for Group Insurance Amendment form be attached to and made a part
of the amendment.
Sign Nam
Print Name:
A
entative
//
Title:
Date: 1 3// l
Standard Online Amendment Request 12/28/2012 2:35 PM
A Superior vsion®
May 15, 2013
Ms. Missy Leflar
Human Resources Director
City of Fayetteville, Arkansas
113 West Mountain
Fayetteville, AR 72701
Our Members. Our Mission.
RE: Executed Originals of Group Vision Application and Business Associate
Agreement
Ms. Leflar,
Your letter requesting fully executed copies of the original signed Group Vision
Application and Business Associate Agreement was sent to my attention for
processing.
Enclosed are the fully executed original documents. We already have the executed
copies on file from when they were received and returned via email, but will also
retain copies of these fully executed originals in our files.
Yours in Superior Service,
IS'
Scott Austin
Compliance Coordinator
Superior Vision Services, Inc.
Enclosures
cc: Nikky Hill, Gallagher Benefit Services, Inc.
Janice Nadolski, Superior Vision Services, Inc.
Pam Woodward, Superior Vision Services, Inc.
Roxanne Koopman, Superior Vision Services, Inc.
11101 White Rock Road A Rancho Cordova, CA 95670 • Tel 800-923-6766 • Fax 916-852-2290
BUSINESS ASSOCIATE AGREEMENT
THIS BUSINESS ASSOCIATE AGREEMENT is made and entered into as of the 1s` day of January, 2013
by and between Superior Vision Services, Inc. ("Business Associate") and City of Fayetteville ("Client Group").
RECITALS
Whereas, the parties desire to enter into an agreement to ensure compliance with the privacy provisions of
the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), the Health Information Technology for
Economic and Clinic Health Act, as incorporated in the American Recovery and Reinvestment Act of 2009 (the
"HITECH Act"), and regulations promulgated from time to time there under (the "Privacy/HITECH Rules").
AGREEMENT
ACCORDINGLY, the parties hereby agree as follows:
Effective Date: This Agreement shall become effective as of the date referenced above.
Defined Terms: Unless otherwise indicated in this Agreement, all capitalized terms shall have the
meanings provided therein or in Section 8 below, or as provided in HIPAA, the HITECH Act, and/or the
Privacy/HITECH Rules.
Business Associate Assurances: Business Associate warrants and agrees as follows:
(a) Use and Disclosure of Protected Health Information ("PHI") for Purposes of the Underlying
Agreement: Business Associate may use or disclose PHI received from Client Group: (i.) to
perform functions, activities, or services for, or on behalf of Client Group provided that such use
or disclosure would not violate HIPAA and/or the HITECH Act if made by Client Group as a
Covered Entity; or (ii.) as required or permitted by applicable law, rule, regulation, or regulatory
agency.
(b) Other Permitted Uses and Disclosures of PHI: In addition to the above, Business Associate may:
(i.) use PHI, if necessary, for purposes of its own management and administration or to carry
out its legal responsibilities.
(ii.) disclose PHI, if necessary, if the following requirements are met:
(A.) the disclosure is required by law; or
(B.) Business Associate obtains reasonable assurances from the party to whom the
information is disclosed that it will be held confidentially and used or further
disclosed only as required by law or for the purpose for which it was disclosed
to the person, and the person notifies Business Associate of any instances of
which it is aware in which the confidentiality of the PHI has been breached,
consistent with the standards of 45 C.F.R. § 504(e)(4)(ii).
(iii.) use PHI to provide Data Aggregation services to Client Group as permitted by HIPAA
and/or the HITECH Act.
Business Associate shall not use or disclose PHI for any other purpose not described above.
(c.) Minimum Necessary Disclosure: When disclosing PHI as permitted under the Underlying
Agreement, Business Associate shall disclose only the minimum PHI necessary for the recipient
to perform the functions or services for which it is disclosed.
(d.) Adequate Safeguards for PHI: Business Associate shall maintain appropriate administrative,
technical and physical safeguards and security measures to prevent use or disclosure of any PHI,
other than permitted or required by this Agreement or as authorized in writing by Client Group.
Business Associate will implement administrative, physical, and technical safeguards that
reasonably and appropriately protect the confidentiality, integrity, and availability of Electronic
Protected Health Information that Business Associate creates, receives, maintains, or transmits on
Client Group's behalf as required by the Security Rule and the HITECH Act (and any current and
future regulations promulgated under HIPAA or the HITECH Act).
(e.) Reporting: Business Associate shall report to Client Group within five (5) business days, any
use or disclosure of PHI in violation of this Agreement or the Privacy/HITECH Rules, of which
Business Associate becomes aware or any "Breach of Unsecured Protected Health Information"
as these terms are defined by the HITECH Act and any implementing regulations. Business
Associate shall (i.) identify the nature of the Breach, unauthorized use or disclosure; (ii.) identify
the PHI used or disclosed; (iii.) identify who made the unauthorized use or received the
unauthorized disclosure; (iv.) identify what Business Associate has done or shall do to mitigate
any deleterious effect of the unauthorized use or disclosure; (v.) identify what corrective action
Business Associate has taken or shall take to prevent future similar unauthorized use or
disclosure; and (vi) provide such other information, including a written report, as reasonably
requested by Client Group.
(f.) Security Incidents: Business Associate will report to Client Group any unauthorized:
(i.) Access, use, disclosure, modification, or destruction of Client Group's Electronic
Protected Health Information of which Business Associate becomes aware; or
(ii.) Interference with system operations in Business Associate's Information Systems
involving Client Group's Electronic Protected Health Information of which Business
Associate becomes aware.
Business Associate will cooperate with Client Group in investigating the Breach and in meeting
Client Group's obligations under the HITECH Act and any other security breach notification
laws. Any such report shall include the identification (if known) of each individual whose
Unsecured Protected Health Information has been, or is reasonably believed by Business
Associate to have been, accessed, acquired, or disclosed during such Breach. Business Associate
shall indemnify and hold harmless Client Group for all costs associated with the Breach and in
meeting Client Group's obligations under the HITECH Act and any other security breach
notification laws (and regulations promulgated thereunder) if the Breach was caused or permitted
by Business Associate's acts or omissions or the acts or omissions of Business Associate's
agents, officers, employees or subcontractors.
(g.) Return or Destruction of PHI: As promptly as possible, but not later than thirty (30) days after
the effective date of the termination of this Agreement for any reason, Business Associate will
return to Client Group or destroy all PHI in whatever form or medium. Within such thirty (30)
days, Business Associate will certify in writing to Client Group that such return or destruction has
been completed, or if return or destruction is not feasible, written justification explaining why
such PHI could not be returned or destroyed. If it is not feasible to return or destroy PHI,
Business Associate shall continue to extend the protections of this Agreement to such PHI, and
limit further use of such PHI to those purposes that make the return or destruction of such PHI
infeasible.
(h.) Breach/Termination: If Client Group determines that Business Associate has breached a material
term of this Agreement, Client Group may terminate the Agreement immediately upon written
notice to Business Associate. If termination is not feasible, Client Group has the right to report
the problem to the Secretary of the U.S. Department of Health and Human Services and/or Office
of Civil Rights.
(i.) Accounting/Tracking: To the extent required by the Privacy/HITECH Rules, Business Associate
shall keep an accounting of information regarding all disclosures of PHI that it makes, and make
such information available to Client Group or to the individuals who are the subject of the PHI
upon written direction from Client Group. Such an accounting shall not be necessary if the
disclosure was for purposes of "payment" or "health care operations" as defined in HIPAA, the
HITECH ACT and/or the Privacy/HITECH Rules.
(j.) Access to Books and Records: Business Associate shall make its internal practices, books, and
records relating to the use and disclosure of PHI available to the Secretary of the United States
Department of Health and Human Services (the "Secretary") for purposes of determining Client
Group's compliance with the Privacy/HITECH Rules. Business Associate shall immediately
2
notify Client Group of any requests made by the Secretary and/or the Secretary's authorized
representatives related to Client Group or the Services provided under the Underlying Agreement,
and provide Client Group with copies of any documents produced in response to such request.
(k.) Access to and Amendment of PHI: To the extent that the parties mutually agree in writing that
the PHI disclosed to Business Associate pursuant to the Underlying Agreement is part of a
Designated Record Set, as defined in 45 C.F.R. § 164.501, and that such Designated Record Set
(or a portion thereof) is to be maintained by Business Associate, Business Associate shall: (i.)
make the PHI specified by Client Group available to individual(s) identified by Client Group as
being entitled to access and copy such PHI, and (ii.) make PHI available to Client Group for the
purpose of amendment and incorporating such amendments into the PHI. Business Associate
shall provide such access and incorporate such amendments within the time and in the manner
specified by Client Group and shall make such information available in an electronic format
where directed by Client Group.
(l.) Use of Subcontractors and Agents: Business Associate shall require each of its agents and
subcontractors that receive PHI from Business Associate to execute a written agreement
obligating the agent or subcontractor to comply with all the terms of this Agreement.
(m.) Indemnification: Business Associate shall defend, indemnify, and hold Client Group, its parent,
subsidiaries, affiliates, fiduciaries and each of their officers, directors, employees and agents
harmless from any and all claims, causes of action, suits, demand, liability, damages, awards,
judgments, fines, penalties, and costs (including reasonable attorneys fees) arising out of any
disclosure or use of PHI by Business Associate, its agents, employees, or contractors in violation
of this Agreement.
4. Automatic Amendment: Upon the effective date of any amendment to the Privacy/HITECH Rules, this
Agreement will be automatically amended to be consistent with such regulations.
5. De -Identified Health Information: Business Associate may use or disclose "de -identified information" (as
defined in 45 C.F.R. § 164.514(b) collected or otherwise provided under the Agreement provided such use
and/or disclosure is in compliance with the Privacy/HITECH Rules and the Underlying Agreement.
6. Limited Data Set: Business Associate's use, disclosure or request of Protected Health Information shall
utilize a Limited Data Set if practicable.
7. Miscellaneous: If any state law imposes more stringent privacy requirements with regard to PHI on the
parties than that provided by HIPAA and/or the HITECH Act, then state law shall govern the conduct of the
respective parties.
8. Definitions: As used herein, the terms below shall have the following meanings:
(a.) "Covered Entity" means a health care organization, including all health plans, all healthcare
clearing houses, and those healthcare providers that transmit health information in electronic form
in connection with certain common, health care related transactions that are subject to regulation
under HIPAA and/or the HITECH Act, including without limitation, 45 C.F.R. § 160.
(b.) "Protected Health Information" or "PHI" means information, including demographic information,
that (i.) relates to the past, present or future physical or mental health or condition of an individual;
the provision of health care to an individual; and (ii.) identifies the individual (or for which there is
a reasonable basis for believing that the information can be used to identify the individual.
(c.) "Use" or "Uses" means, with respect to Protected Health Information, the sharing, employment,
application, utilization, examination or analysis of such Protected Health Information within the
Business Associate's internal operations.
(d.) "Disclose" and "Disclosure" means, with respect to Protected Health Information, the release,
transfer, provision of access to, or divulging in any other manner of Protected Health Information
outside Business Associate's internal operations or to other than its employees.
This Agreement may be executed in counterparts which, when combined, shall constitute the entire
agreement among the parties.
K1
IN WITNESS WHEREOF, the parties have duly executed this Business Associate Agreement on the date
first written above.
Superio V' ' n Services, Inc.
By:
Name: Kimberley Hess
Its: Sr. Vice President Operations
M
City of Eayettevill .
By
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Name: IDtJ€I:f i Ai
Its:
NATIONAL GUARDIAN LIFE INSURANCE COMPANY
GROUP VISION APPLICATION
Administered by: Superior Vision Services, Inc.
Superior Vision -
11101 White Rock Road, Suite 150
OurM ben. Our Misriau.
Rancho Cordova, CA 95670
Group Effective Date: January 1, 2013 Group No. 30764
Legal Group Name City of Fayetteville Tax ID Number 71-6018462
Physical Address 113 West Mountain
ERISA Number N/A
City \ State \ Zip Fayetteville, AR 72701 SIC \ Industry
Billing Address 113 West Mountain # of Employees
City \ State \ Zip Fayetteville, AR 72701 # of Eligible
Eligibility Contact Missy Leflar
Billing Contact Patricia Leach
Initial Premium Rates:
Employee Employee +
Only $ 6.30 Spouse $ 12.20
Municipality
$ear 6 SS
Phone (479) 575-8298 Fax (479) 718-7698
Phone (479) 575-8Z9S Sv255 Fax (479) 718-₹ =
`2;3
Employee + Employee +
Child(ren) $ 12.20 Family $ 17.94
Initial Guarantee Period: Premiums are not guaranteed beyond the below date.
January 1, 2013 through December 31, 2016
Eligibility data will be submitted using:
❑ National Guardian enrollment forms
Email or electronic media (Employer must keep signed enrollment forms on file for future reference.)
Eligibility: gEmployees working ,$ hours per week will be effective for coverage upon: ®-3@ ays ❑ L119060 Days 90 Days
Eh1st of the month following ,1 days ❑ Other
Eligible Dependents include: Legal Spouse, Domestic Partner (WYes o) and Children under the age of 26 years old regardless of
marital or student status.
Participation:
Depending on group size and coverage elected, specific participation requirements may apply. Participation must be met before the
insurance can be effective and must be maintained continuously while insurance is in force to prevent cancellation of coverage. I
understand and agree that audits will be made by National Guardian Life Insurance Company now and in the future to verify the
number and names of employees of this group. I will furnish with application and upon any future request any other information
requested.
Please send Membership Materials and Enrollment Materials to (CHECK ONE):
,Group Attn: M1 5 a .d tr Phone (4 $ � ;12 1 � Email yYl e f, r L/,iixef1--e;�f lle.d r (: s
❑ Agent .�µt5 iS ft.TRicEovi= . 1NPhone E Into Email N 2of r lU L 2c
I hereby certify that the
information provided herein is true and complete to the best of my knowledge and that I have read and understand this form.
The information contained herein describes the essential provisions of the elected coverage(s) discussed between the above client and
an authorized National Guardian Life Insurance Co. representative. By signing this form, both parties agree that these are the essential
provisions the client is purchasing. The details of this form may be changed by either party with mutual agreement.
WARNING: Any person who knowingly and with intent to defraud any insurance company or other person files an application for
insurance or statement of claim containing any materially false information or conceals, for the purpose of misleading, information
concerning any fact material thereto, commits a fraudulent insurance act, which is a crime and may subject such person to criminal and
civil penalties. /-Th
Signed:
Print Nar
National
NVI/NDN GRP APP 04/06 AR 20060808
See reverse side
Agent
Tax I.D. #
Jacob Salinas
36-4291971
Agency
Phone
Gallagher Benefit Services, Inc.
Address
Fax
1650 East Battlefield, Suite 210
City/State/Zip
Email
Springfield, MO 65804
National Guardian Life Insurance Company appointment on file: ❑ Yes ® No ❑ Pending ❑ N/A
NVI/NDN GRP APP 04/06 AR 20060808
See reverse side
BUSINESS ASSOCIATE AGREEMENT
This Business Associate Agreement ("Agreement") is entered into on this 3 15--p
day of 1, , c j (the "Effective Date"), by and between The City of Fayetteville,
Arkansas on behalf of the City of Fayetteville Group Health Plan ("City") and Gallagher
Benefit Services, Inc. ("Business Associate").
RECITALS:
WHEREAS, City and Business Associate mutually desire to outline their individual
responsibilities with respect to the use and/or disclosure of Protected Health Information
("PHT') as mandated by the Privacy Rule promulgated under the Administrative
Simplifications subtitle of the Health Insurance Portability and Accountability Act of 1996
("HIPAA") including all pertinent regulations issued by the U.S. Department of Health and
Human Services as outlined in 45 C.F.R. Parts 160, 162 and 164; ("HIPAA Privacy Rules
and/or Security Standards")and
WHEREAS, City and Business Associate understand and agree that the HIPAA
Privacy Rules and Security Standards requires the City and Business Associate enter into a
Business Associate Agreement which shall govern the use and/or disclosure of PHI and the
security of PHI and ePHI.
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. When used in this Agreement and capitalized, the following
terms have the following meanings:
(a) "Breach" shall mean the unauthorized acquisition, access, use, or
disclosure of PHI which compromises the security or privacy of such information.
However, the term 'breach' shall not include (1) any unintentional acquisition, access,
or use of PHI by an employee or individual acting under the authority of a City or
business associate if such acquisition, access, or use was made in good faith and
within the course and scope of the employment or other professional relationship of
such employee or individual, respectively, with the City or business associate; and
such information is not further acquired, accessed, used, or disclosed by any person; or
(2) any inadvertent disclosure from an individual who is otherwise authorized to
access protected health information at a facility operated by a City or business
associate to another similarly situated individual at same facility; and (3) any such
information received as a result of such disclosure is not further acquired, accessed,
used, or disclosed without authorization by any person.
(b) "Electronic Protected Health Information" or "ePHI" shall mean
Protected Health Information transmitted by electronic media or maintained in
electronic media.
(c) "Individual" shall have the same meaning as the term "Individual" in
45 C.F.R. §164.103 and shall include a person who qualifies as a personal
representative in accordance with 45 C.F.R. § 164.502(g).
(d) "Privacy Rule" shall mean the Standards for Privacy of Individual
Identifiable Health Information as set forth at 45 C.F.R. Parts 160 and 164 Subparts A
and E.
(e) "Protected Health Information" or "PHT' shall have the same meaning
as the term "protected health information" in 45 C.F.R. § 160.103, limited to the
information created or received by Business Associate from or on behalf of City.
(f) "Required by Law" shall have the same meaning as the term "required
by law" in 45 C.F.R. § 164.103.
(g) "Secretary" shall mean the Secretary of the Department of Health and
Human Services or his or her designee.
(h) "Security Incident" shall mean any attempted or successful
unauthorized access, use, disclosure, modification or destruction of information or
systems operations in an electronic information system.
(i) "Security Rule" shall mean the Standards for Security of PHI,
including ePHI, as set forth at 45 C.F.R. Parts 160 and 164 Subpart C.
(j) "Unsecured Protected Health Information" shall mean protected
health information that is not rendered unusable, unreadable, or indecipherable to
unauthorized individuals through the use of a technology or methodology specified by
the Secretary.
Terms used but not defined in this Agreement shall have the same meaning as those
terms in the HIPAA regulations.
2. Obligations and Activities of Business Associate Regarding PHI.
(a) Business Associate agrees to not use or further disclose PHI other than
as permitted or required by this Agreement or as Required by Law.
(b) Business Associate agrees to use appropriate safeguards to prevent use
or disclosure of the PHI other than as provided for by this Agreement.
(c) Business Associate agrees to ensure that any agents, including sub-
contractors (excluding entities that are merely conduits), to whom it provides PHI
agree to the same restrictions and conditions that apply to Business Associate with
respect to such information.
Page 2 of 9
(d) Business Associate agrees to provide access, at the request of City, and
in a reasonable time and manner designated by City, to PHI in a Designated Record
Set that is not also in City's possession, to City in order for City to meet the
requirements under 45 C.F.R. § 164.524.
(e) Business Associate agrees to make any amendment to PHI in a
Designated Record Set that the City directs or agrees to pursuant to 45 C.F.R. §
164.526 in a reasonable time and manner designated by City.
(f) Business Associate agrees to make internal practices books and records
relating to the use and disclosure of PHI available to the Secretary, in a reasonable
time and manner as designated by the City or Secretary, for purposes of the Secretary
determining City's compliance with the Privacy Rule. Business Associate shall
immediately notify City upon receipt or notice of any request by the Secretary to
conduct an investigation with respect to PHI received from the City.
(g) Business Associate agrees to document any disclosures of PHI that are
not excepted under 45 C.F.R. § 164.528(a)(1) as would be required for City to respond
to a request by an Individual for an accounting of disclosures of PHI in accordance
with 45 C.F.R. § 164.528.
(h) Business Associate agrees to provide to City or an Individual, in a time
and manner designated by City, information collected in accordance with paragraph
(g) above, to permit City to respond to a request by an Individual for an accounting of
disclosures of PHI in accordance with 45 C.F.R. § 164.528.
(i) Business Associate agrees to use or disclose PHI pursuant to the
request of City; provided, however, that City shall not request Business Associate to
use or disclose PHI in any manner that would not be permissible under the Privacy
Rule if done by City.
3. Permitted Uses and Disclosures of PHI by Business Associate.
(a) Business Associate may use or disclose PHI to perform functions,
activities or services for, or on behalf of, City provided that such use or disclosure
would not violate the Privacy Rule if done by City.
(b) Business Associate may use PHI for the proper management and
administration of Business Associate and to carry out the legal responsibilities of
Business Associate.
Page 3 of 9
(c) Business Associate may disclose PHI for the proper management and
administration of Business Associate and to carry out the legal responsibilities of
Business Associate if:
(i) such disclosure is Required by Law, or
(ii) Business Associate obtains reasonable assurances from the person
to whom the information is disclosed that such information will remain
confidential and used or further disclosed only as Required by Law or
for the purposes for which it was disclosed to the person, and the
person agrees to notify Business Associate of any instances of which it
is aware that the confidentiality of the information has been breached.
(d) Business Associate shall limit the PHI to the extent practicable, to the
limited data set or if needed by the Business Associate, to the minimum necessary to
accomplish the intended purpose of such use, disclosure or request subject to
exceptions set forth in the Privacy Rule.
(e) Business Associate may use PHI to provide Data Aggregation services
to City as permitted by 42 C.F.R. § 164.504(e)(2)(i)(B).
4. Obligations of City Regarding PHI.
(a) City shall provide Business Associate with the notice of privacy
practices that City produces in accordance with 45 C.F.R. § 164.520, as well as any
changes to such notice.
(b) City shall provide Business Associate with any changes in, or
revocation of, authorization by an Individual to use or disclose PHI, if such changes
affect Business Associate's permitted or required uses and disclosures.
(c) City shall notify Business Associate of any restriction to the use or
disclosure of PHI that City has agreed to in accordance with 45 C.F.R. § 164.522, if
such restrictions affect Business Associate's permitted or required uses and
disclosures.
(d) City shall require all of its employees, agents and representatives to be
appropriately informed of its legal obligations pursuant to this Agreement and the
Privacy Rule and Security Standards required by HIPAA and will reasonably
cooperate with Business Associate in the performance of the mutual obligations under
this Agreement.
Page 4 of 9
5. Security of Protected Health Information.
(a) Business Associate has implemented policies and procedures to ensure
that its receipt, maintenance, or transmission of all protected health information
("PHP'), either electronic or otherwise, on behalf of City complies with the applicable
administrative, physical, and technical safeguards required protecting the
confidentiality, availability and integrity of PHI as required by the HIPAA Privacy
Rules and Security Standards.
(b) Business Associate agrees that it will ensure that agents or
subcontractors agree to implement the applicable administrative, physical, and
technical safeguards required to protect the confidentiality, availability and integrity of
PHI as required by HIPAA Privacy Rules and Security Standards.
(c) Business Associate agrees to report to City any Security Incident (as
defined 45 C.F.R. Part 164.304) of which it becomes aware. Business Associate
agrees to report the Security Incident to the City as soon as reasonably practicable, but
not later than 10 business days from the date the Business Associate becomes aware of
the incident.
(d) Business Associate agrees to establish procedures to mitigate, to the
extent possible, any harmful effect that is known to Business Associate of a use or
disclosure of PHI by Business Associate in violation of this Agreement.
(e) Business Associate agrees to immediately notify City upon discovery
of any Breach of Unsecured Protected Health Information (as defined in 45 C.F.R. §
164.402 and 164.410) and provide to City, to the extent available to Business
Associate, all information required to permit City to comply with the requirements of
45 C.F.R. Part 164 Subpart D.
(f) City agrees and understands that the City is independently responsible
for the security of all PHI in its possession (electronic or otherwise), including all PHI
that it receives from outside sources including the Business Associate.
6. Term and Termination.
(a) Term. This Agreement shall be effective as of the Effective Date and
shall remain in effect until the Business Associate relationship with the City is
terminated and all PHI is returned, destroyed or is otherwise protected as set forth in
Section 6(d).
Page 5 of 9
(b) Termination for Cause by City. Upon City's knowledge of a material
breach by Business Associate, City shall provide an opportunity for Business
Associate to cure the breach. If Business Associate does not cure the breach within 30
days from the date that City provides notice of such breach to Business Associate, City
shall have the right to immediately terminate this Agreement and the underlying
services agreement between City and Business Associate.
(c) Termination by Business Associate. This Agreement may be
terminated by Business Associate upon 30 days prior written notice to City in the
event that Business Associate, acting in good faith, believes that the requirements of
any law, legislation, consent decree, judicial action, governmental regulation or
agency opinion, enacted, issued, or otherwise effective after the date of this
Agreement and applicable to PHI or to this Agreement, cannot be met by Business
Associate in a commercially reasonable manner and without significant additional
expense.
(d) Effect of Termination. Upon termination of this Agreement for any
reason, at the request of City, Business Associate shall return or destroy all PHI
received from City, or created or received by Business Associate on behalf of City.
Business Associate shall not retain any copies of the PHI unless necessary for proper
document retention/archival purposes only or if such PHI is stored as a result of
backup email systems that store emails for emergency backup purposes. If the return or
destruction of PHI is infeasible, Business Associate shall extend the protections of this
Agreement to such PHI and limit further uses and disclosures of such PHI to those
purposes that make the return or destruction infeasible, for so long as Business
Associate maintains such PHI.
7. Amendment.
The parties may agree to amend this Agreement from time to time in any other respect
that they deem appropriate. This Agreement shall not be amended except by written
instrument executed by the parties.
8. Indemnification.
Business Associate shall indemnify and hold harmless City from and against any and
all costs, expenses, claims, demands, causes of action, damages, attorneys' fees and judgments
that arise out of or that may be imposed upon, incurred by, or brought against City to the
extent directly resulting from a breach of this Agreement or any violation of the Privacy Rule
or other applicable HIPAA regulations by Business Associate. The indemnification
obligations provided for in this Section will commence on the effective date of this
Agreement and will survive its termination.
Page 6 of 9
Limitation of Liability. Notwithstanding any other term or provision of this Agreement,
neither party shall be liable to the other for any exemplary, special indirect, incidental,
consequential or punitive damages (including but not limited to lost profits) which may result
from the other party's action or its failure to perform any term or condition of this Agreement
or whether such liability is based upon tort, strict liability, breach of warranties, failure of
essential purpose or otherwise and if advised of the possibility of such damages. This
provision applies to the fullest extent permitted by applicable law.
9. Severability.
The parties intend this Agreement to be enforced as written. However, (i) if any
portion or provision of this Agreement is to any extent declared illegal or unenforceable by a
duly authorized court having jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, will not be affected thereby, and each portion and provision
of this Agreement will be valid and enforceable to the fullest extent permitted by law; and (ii)
if any provision, or part thereof, is held to be unenforceable because of the duration of such
provision, the City and the Business Associate agree that the court making such determination
will have the power to modify such provision, and such modified provision will then be
enforceable to the fullest extent permitted by law.
10. Notices.
All notices, requests, consents and other communications hereunder will be in writing,
will be addressed to the receiving party's address set forth below or to such other address as a
party may designate by notice hereunder, and will be either (i) delivered by hand, (ii) made
facsimile transmission, (iii) sent by overnight courier, or (iv) sent by registered mail or
certified mail, return receipt requested, postage prepaid.
If to the City:
City of Fayetteville
Missy Leflar
Human Resources Director
113 W Mountain
Fayetteville, AR 72701
If to the Business Associate:
Gallagher Benefit Services, Inc.
Jacob Salinas
Sr. Benefit Consultant
1650 E Battlefield, Ste 210
Springfield, MO 65804
Page 7 of 9
11. Regulatory References.
A reference in this Agreement to a section in the Privacy Rule means the referenced
section or its successor, and for which compliance is required.
12. Headings and Captions.
The headings and captions of the various subdivisions of the Agreement are for
convenience of reference only and will in no way modify or affect the meaning or
construction of any of the terms or provisions hereof.
13. Entire Agreement.
This Agreement sets forth the entire understanding of the parties with respect to the
subject matter set forth herein and supersedes all prior agreements, arrangements and
communications, whether oral or written, pertaining to the subject matter hereof.
14. Binding Effect. The provisions of this Agreement shall be binding upon and
shall inure to the benefit of both Parties and their respective successors and assigns.
15. No Waiver of Rights, Powers and Remedies.
No failure or delay by a party hereto in exercising any right, power or remedy under
this Agreement, and no course of dealing between the parties hereto, will operate as a waiver
of any such right, power or remedy of the party. No single or partial exercise of any right,
power or remedy under this Agreement by a party hereto, nor any abandonment or
discontinuance of steps to enforce any such right, power or remedy, will preclude such party
from any other or further exercise thereof or the exercise of any other right, power or remedy
hereunder. The election of any remedy by a party hereto will not constitute a waiver of the
right of such party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement will entitle the party receiving such notice or
demand to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of the party giving such notice or demand to any other or
further action in any circumstances without such notice or demand. The terms and provisions
of this Agreement may be waived, or consent for the departure therefrom granted, only by
written document executed by the party entitled to the benefits of such terms or provisions.
No such waiver or consent will be deemed to be or will constitute a waiver or consent with
respect to any other terms or provisions of this Agreement, whether or not similar. Each such
waiver or consent will be effective only in the specific instance and for the purpose for which
it was given, and will not constitute a continuing waiver or consent.
16. Governing Law.
This Agreement will be governed by and construed in accordance with the laws of
the State of Arkansas.
Page 8 of 9
17. Interpretation.
It is the Parties' intent to comply strictly with all applicable laws, including without
limitation, HIPAA, state statutes, or regulations (collectively, the "Regulatory Laws"), in
connection with this Agreement. In the event there shall be a change in the Regulatory Laws,
or in the reasoned interpretation of any of the Regulatory Laws or the adoption of new federal
or state legislation, any of which are reasonably likely to materially and adversely affect the
manner in which either Party may perform or be compensated under this Agreement or which
shall make this Agreement unlawful, the Parties shall immediately enter into good faith
negotiations regarding a new arrangement or basis for compensation pursuant to this
Agreement that complies with the law, regulation or policy and that approximates as closely
as possible the economic position of the Parties prior to the change. In addition, the Parties
hereto have negotiated and prepared the terms of this Agreement in good faith with the intent
that each and every one or the terms, covenants and conditions herein be binding upon and
inure to the benefit of the respective Parties. To the extent this Agreement is in violation of
applicable law, then the Parties agree to negotiate in good faith to amend this Agreement, to
the extent possible consistent with its purposes, to conform to law.
IN WITNESS WHEREOF, the parties have executed this Business Associate
Agreement as of the Effective Date.
BUSINESS ASSOCIATE:
R BAIT SERVICES, INC.
By:_
Name:
Title:
CITY:
N e•
Title:
Page 9 of 9
APPENDIX II
Summary Plan Document (SPD) Amendment
City of Fayetteville Cafeteria Plan
December, 2012
By signing below the City of Fayetteville ("Employer") hereby adopts the
following Amendments to its Cafeteria Plan Summary Plan Document:
1. Over the counter drugs may only be reimbursed under Flexible Spending Account and
Health Savings Account plans as permitted by Internal Revenue Service and other federal
regulations.
2. Grace Periods: Claims may be filed for Flexible Spending Account and Health
Savings Account reimbursements for a given calendar year either during that same
calendar year during which the qualified expense was incurred or during the Grace
Period. "Grace Period" is defined as from January 1St the last day of March in the
subsequent calendar year or the time limit allowed by law, whichever is shorter. Unused
funds present in the FSA as of April 1St shall be forfeited.
3. Employees on formally certified, continuous (as opposed to intermittent) Family and
Medical Leave Act leave, who have the required paperwork on file in Human Resources,
may make arrangements through Human Resources discontinue the employee's
contributions into his/her Flexible Spending Account to the extent required by law.
4. The maximum annual reimbursement allowed under the Flexible Spending Accounts,
Health Savings Accounts, and Dependent Care Accounts shall mirror that set by
applicable federal law.
5. Eligibility requirements shall be amended to exclude employees who are regularly
scheduled to work fewer than 30 hours a week.
i eld Jordan D to
Mayor