HomeMy WebLinkAboutResolution - 6569 - Contract - Healthcare Benefits Inc - Flexible Spending Plan - 10/14/1999j I i .1, 1 ■
Resolution No.6569
Oct. 14, 1999
Item No. 78
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and
directed to execute for and on behalf of the City of Lubbock a contract for a Flexible
Spending Plan, by and between the City of Lubbock and HealthCare Benefits, Inc. of
Richardson, Texas and related documents. Said contract is attached hereto and
incorporated in this resolution as if fully set forth herein and shall be included in the
minutes of the City Council.
Passed by the City Council this 14th day of
ATTEST:
City Secretary
AS TO CONTENT:
Victor Kilm Purchasing Manager
APPROVED AS TO FORM:
/1/,� "P. - �
William de Haas
Competition and Contracts Manager/Attorney
gs:ccdocs/HealthCare Benefits, Inc.res
October 4, 1999
in no
AGREEMENT BY AND BETWEEN
THE CITY OF LI BBOCK, TEXAS AND
HEALTHCARE BENEFITS, INC.
Resolution No. 6569
Oct. 14, 1999
Item No. 78
THIS AGREEMENT entered into this 1" day of January, 2000 by and between the CITY
OF LUBBOCK, TEXAS, a municipal home rule corporation (hereinafter called "Plan
Administrator") and HEALTHCARE BENEFITS, INC. (hereinafter called "Recordkeeper") to
provide recordkeeping services for a Flexible Spending Plan.
WHEREAS, the Plan Administrator desires to have services provided for recordkeeping
services for a flexible spending plan; and
WHEREAS, the Recordkeeper has demonstrated that it can provide said services; and
WHEREAS, the Plan Administrator and Recordkeeper desire to enter into an Agreement
to provide said services.
NOW, THEREFORE, the parties agree as follows:
1. The parties agree to abide by the terms and conditions of the Proposed to Implement
and Provide Recordkeeping Services for a Flexible Spending Plan which is attached to
this Agreement as Exhibit "A" and is incorporated as if fully set forth herein.
2. In addition to the terms and conditions set out in Exhibit "A", the parties further agree
as follows:
a. This Agreement is for a term of one (1) year from the effective date and may be
extended for two (2) additional one (1) year terms at the mutual agreement of both
parties.
b. Notice or communications from the Plan Administrator to the Recordkeeper shall
be addressed to the Recordkeeper and shall be deemed to be duly given or served if
the same shall be sent by United States mail, telegraph, telex, FAX or other similar
or analogous means, to the address shown below, unless the Plan Administrator has
been requested to send such communications to another address:
HealthCare Benefits, Inc.
1001 East Campbell Road
Richardson TX 75081
Notices or communications from the Recordkeeper to the Plan Administrator shall
be addressed to the Plan Administrator and shall be deemed to be duly given or
served if the same shall be sent by United States mail, telegraph, telex, FAX or
other similar or analogous means, to the address shown below, unless the
Recordkeepet has been requested to send such communications to another address:
The City of Lubbock
P O Box 2000
Lubbock,TX 79457
Fax: 806-775-3316
' Notice and communication described in this paragraph that are sent by United
States mail will be deemed to be duly given or served on the third business day
following the date the notice/communication is mailed.
c. This contract shall be construed and enforced according to the laws of the State of
Texas.
d. The Plan Administrator may terminate the services of the Recordkeeper at any time
upon giving to the Recordkeeper 90 days written notice of its intention to do so.
Such notice from the Plan Administrator must include the name and address of the
new Recordkeeper. The Recordkeeper may resign at any time upon 90 days written
notice to the Plan Administrator. The Recordkeeper upon its resignation shall
complete the processing of all services described in this Agreement which have
commenced prior to the effective date of the termination of this Agreement. The
provisions of this Section 2d. replace the paragraph entitled TERMINATION OF
SERVICES in attached Exhibit "A".
SIGNED THIS DAY THE 14th of October 11999.
A ST•
&��
Ka 'e arnell,
City S retary
APPROVED AS TOCO TENT:
fidi!!�
Mary Andrews,
Managing Director of Humanesources
APPROVED AS TO FORM:
William de Haas,
Competition and Contracts Manager
HEALTHCA NEFITS, INC.:
Russell derson
ent, HealthCare Benefits, Inc.
IL
Resolution No. 6569
Oct. 14, 1999
Item No. 78
HealthCare Benefits, Inc.
City of Lubbock
Effective Date: December 1, 1999
Proposal to Implement and Provide
Recordkeeping Services
For A Flexible Spending Plan
September 28,1999
(Premium/Health/Dependent Care)
• EXHIBIT A •
HealthCare MIL Bluecross B1ueShield
Benefits Inc W. . of Texas*
..........................................................................._.............._......._......................................................................._.........................._.............._.............
A Division of Health Care Service Corporation,
Strong • Flexible • Unique aMutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
2644.030-399
EXECUTIVE SUMMARY
INTRODUCTION
City of Lubbock is considering the implementation of a flexible spending plan in which
employees are offered, under a salary reduction option, a choice between cash and tax-free
benefits. Tax-free benefits can include pre-tax payments of health, dental and group term life
insurance premiums and non-taxable reimbursement of out-of-pocket health care expenses
(e.g., co-insurance, medical and dental deductibles, and other non -covered medical expenses).
Note: If group term life insurance premiums are paid through the Flexible Spending Plan, only
up to $50,000 of group coverage, including any amount City of Lubbock already pays for an
3 employee, can be paid on a pre-tax basis. The plan can also offer a non-taxable reimbursement
option for dependent/child care expenses.
City of Lubbock understands that plan design and implementation, especially employee
communication, are very important in order to maximize plan participation and to ensure a
smooth transition for future additional benefits.
There are many advantages to implementing a flexible spending plan, including the following:
Employer Perspective
❑ Promotes excellence through a "leading edge" approach to benefits delivery.
❑ Provides a tool to better attract, motivate, reward and retain valuable employees.
❑ Reduces employer pressure to provide new benefits.
❑ Helps control future increases in benefit cost.
❑ Helps the employer compete in the marketplace by offering more "take-home" pay.
❑ Provides tax benefits by generally reducing payroll base taxes whenever employees use
pre-tax dollars in lieu of after-tax dollars.
Employee Perspective
❑ Responds to changing employee needs.
❑ Promotes greater loyalty due to an innovative compensation approach.
❑ Increases employee awareness of the value of benefits.
❑ Provides more tax -effective compensation.
❑ Enables employees to structure their own benefit package.
❑ Creates an environment in which new benefits wanted by employees can be added.
HealthCareB1ueCross B1ueShield
Benefits Inc. 41.
of Texas*
_.................................................................................._...._......................q..........................._................_...._.Y.......................... -....................
A Division of Health Care service Corporation,
Strong • Flexible • Unique aMutual Reserve Com *
* Independent Licensees of the Blue Cross and Blue shield Association
26""0499
IMPLEMENTATION OVERVIEW
Successful implementation of the new Flexible Spending Plan will require action in several
areas:
❑ Finalization of plan design specifications;
❑ Development of a communication plan that will ensure understanding and appreciation of
the new program by employees;
❑ Modification of City of Lubbock's payroll system to support the program;
❑ Establishment of a reporting medium to communicate to the recordkeeper the employee
and payroll information required to process the expense reimbursement requests
(Enrollment Form);
❑ Development of plan documentation and completion of government filing procedures to
ensure effective plan administration.
One of the more important areas of plan implementation is effective communication with
employees; the success of the Flexible Spending Plan will depend largely upon how well the
plan is understood. Communication typically involves the development of communication
materials, including announcement letters, audio-visual presentations, brochures, enrollment
forms and worksheets.
Important information to be communicated regarding a Flexible Spending Plan are the tax
savings generated by participation in the plan and the positive effect these savings have on the
employees' paychecks. Therefore, it is necessary that each employee is able to completely
understand the tax savings to be gained from participation in the plan.
Healthcare B1ueCross BlueShield
Benefits Inc: _ ®°f Texas*
... ........ ................................. _.........................................._......._..................................................................._............................................................_..
A Division of Health Care Service Corporation,
Strong • Flexible . Unique 2 a Mutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
ENGAGEMENT MANAGEMENT
(SEE "SERVICES TO BE PROVIDED BY HBI"AS RECORDKEEPER
AND "RESPONSIBILITIES OF THE EMPLOYER" AS ADMINISTRATOR FOR
SPECIFIC ROLES IN THE ENGAGEMENT MANAGEMENT)
RECOMMENDED APPROACH TO PLAN DESIGN AND IMPLEMENTATION
Our recommended approach to the design of a Flexible Spending Plan includes the following
considerations:
❑ Understanding the employer's existing benefit philosophy and the proposed communication
process in order to promote employee participation.
❑ Ensuring that the existing tax law requirements and the current nondiscrimination rules are
met in the plan design.
❑ Discussing and reviewing the plan document and Summary Plan Description with City of
Lubbock's legal counsel to ensure compliance with government requirements.
Plan implementation consists of:
❑ Meeting to establish plan objectives and specifications, the communication process, and the
required modifications to the payroll system.
❑ Agreement on and documentation of plan specifications.
❑ Preparation and review of initial sample Summary Plan Description and plan document.
❑ Review of sample communication material (announcement letter, enrollment forms, and tax
savings examples).
❑ Finalizing the plan document and Summary Plan Description (subject to City of Lubbock's
legal counsel review).
❑ Presentations to management group and/or key employees.
❑ Finalization of employee presentations materials.
❑ In-house presentations to employees.
❑ Filing the Summary Plan Description with the Department of Labor, if applicable.
HealthCare B1ueCross B1ueShield
Benetm Inc 3 IV. . of Texas*
- .................................................................._........................................................................................................................................................
A Division of Health Care Service Corporation,
Strong .
• • Flexible Unique a Mutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
r
PLAN ADMINISTRATIONIRECORDKEEPING
HealthCare Benefits, Inc. ("HBI") can provide service for most of the annual plan administration
steps described below. Please review the section, "Services to be Provided by HBI," which
outlines the specific services to be provided under this proposal. Any additional services will be
provided on a pre -approved fee basis.
Recordkeeping set-up requires the following:
❑ Reviewing the existing payroll system to ensure the practical implementation of the plan.
❑ Review of established reporting medium to the recordkeeper (in-house or external).
❑ Collection and summarization of claims submitted by employees for expenses incurred if
submitted directly to HBI.
❑ Review of plan recordkeeping policies.
❑ Determination of proper reimbursement for each employee, based upon accrued benefits
and expenses incurred.
❑ Reimbursement to employees.
❑ Periodic reporting to the employees regarding account status.
Annual plan administration includes the following steps:
❑ Distribution and collection of annual enrollment forms.
❑ Analysis of enrollment information to ensure accuracy of the elections and to determine
compliance with anti -discrimination rules.
❑ Coordination with the Payroll Department regarding the salary reduction option (this step is
important to ensure accuracy with regard to terminated and newly -hired employees).
❑ Verification that amounts elected by each employee under the plan for certain premiums
equal the actual premiums paid.
❑ Payment of any premiums to insurance carriers or third party administrators, if appropriate.
❑ Transfer of funds to the plan reimbursement account(s), if appropriate.
❑ Disposition of any employee forfeitures (excess elections over expenses incurred).
HealthCare .. B1ueCross B1ueShield
EWnef ' ` Inc. of Texas*
..........................................................................................................................................................................................................................................
A Division of Health Care Service Corporation,
Strong • Flexible • Unique a Mutual Legal Reserve Compaq
4
* Independent Licensees of the Blue Cross and Blue Shield Association
❑ Ongoing employee communication.
❑ Annual preparation and filing of Form 5500 with the Internal Revenue Service.
❑ Annual review of the applicable Federal and state laws to determine proper payroll tax
withholdings.
❑ C.O.B.R.A. notification and compliance.
❑ W-2 reporting of Dependent Care Reimbursements.
HealthCare . _ B1ueCross B1ueShield
Be`ilefMits Inc. of Texas*
... _........ _...................................`..........:........ -.............. ....................... b .................. ...................�_..............�...................... ................... .........
A Division of Health Care Service Corporation,
Strong Flexible Unique aMutual IA Reserve Com
* Independent Licensees of the Blue Cross and Blue Shield Association
SERVICES TO BE PROVIDED BY HBI
PLAN DESIGN AND IMPLEMENTATION
❑ HBI will communicate with appropriate personnel of City of Lubbock to establish plan
objectives and specifications. Representatives of your Human Resources, Payroll as well
as any other pertinent personnel, should be included.
❑ HBI and City of Lubbock will document all conclusions reached at the meeting by
completing the Plan Specifications Checklist.
❑ Upon completion of the Plan Specifications Checklist, City of Lubbock will review and
confirm by signing the "Employer Confirmation" section of the Plan Specifications Checklist.
After City of Lubbock's confirmation of the Plan Specifications Checklist, HBI will provide the
following services and materials:
❑ Enrollment Materials: HBI will provide the following generic enrollment materials for
distribution by City of Lubbock (if requested, a separate fee estimate can be provided for
custom forms):
— Flexible Spending Plan Overview
— Employee Tax Savings Examples
— Annual Tax Savings Worksheet
— Enrollment Election/Change Form
— Expense Reimbursement Request Form
— Sample Summary Plan Description (for appropriate legal review by City of Lubbock's
legal counsel)
— Optional materials (if requested, a separate fee estimate will be provided based
upon determined format)
— Payroll "stuffier" (delivered prior to employee presentations)
— Poster designed with Company logo, colors, etc. (delivered prior to employee
presentations)
— Double -sided 8-1/2 x 11 folders to hold all employee communication materials
— Other materials
❑ Video
For use in the enrollment and education process, HBI will provide City of Lubbock with a
generic video tape for their use in employee presentations. Utilization of a video can
facilitate employees' understanding of the plan. Alternatively, HBI can produce a custom
video in three weeks for City of Lubbock which explains the specifics of City of Lubbock's
plan, utilizing Company logo, colors, etc. (A fully customized video will cost between $8,000-
$12,000. One with logo changes, and other minor changes, will cost between $2,000 and
$4,000).
HealthCareB1ueCross B1ueShield
4.19.
Berke Inc of Texas*
A Division of Health Care
Strong a Flexible
...`.... Unique
.-..............................�...........................Service Corporation,
a Mutual Legal Beserve Company
* Independent Licensees of the Blue Cross and Blue Shield Association
2W403049 9
❑ Other Information:
C.O.B.R.A. compliance information, Sample Initial Notification, and Sample Letter to
Terminating Employee
Discrimination Testing information and questionnaire to be used to provide HBI with
Information Required for Discrimination Testing of the plan
Dependent Care Assistance Required Reporting information
Sample letter for City of Lubbock's use in filing the Summary Plan Description with the
Department of Labor
❑ Presentations: HBI will provide the following presentations:
On a pre -approved fee basis, employee and other optional presentations to explain
plan provisions and advantages of the plan. Presentations will include a video tape
presentation and detailed information packets regarding enrollment and claims
procedures. At this time the number and location of the presentations are unknown.
❑ Plan Documentation: Within three to four weeks after confirmation of the Plan
Specifications Checklist, HBI will design and prepare (for appropriate legal review by City of
Lubbock's legal counsel) sample plan documentation for a Flexible Spending Plan under
Internal Revenue Code Section 125. This plan will offer the following benefit options:
Payment of employee's portion of the premium cost of qualified
City of Lubbock sponsored plans through the "Pre-
tax Premium Account" with pre-tax income;
Reimbursement of other health care expenses through the "Health
Care Expense Reimbursement Account" with pre-tax income; and
Reimbursement of eligible dependent care expenses through
the "Dependent Care Reimbursement Account" with pre-tax
dollars.
Healthcare 41.
Bl Texas* B1ueShield
Benefits Inc:
.................. -............. ....................................................................... _....... 7 .................. ..........-...................._.................................................................
A Division of Health Care Service Corporation,
Strong • Flexible • Unique a Mutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
2644.430-9.99
PLAN RECORDKEEPING
HBI will provide City of Lubbock with recordkeeping, reporting, and check writing services.
These services include:
❑ Customization of HBI's recordkeeping software to accommodate the City of Lubbock's
designed plan, if necessary.
❑ Initial Set- up of employee account information based on the employee enrollment election
information provided by City of Lubbock.
❑ On a periodic basis (as agreed-upon by HBI and City of Lubbock) HBI will update the
recordkeeping system with employee census and payroll data based upon City of
Lubbock's provided information.
❑ After participant additions, changes and terminations have been processed for each payroll
period, HBI will reconcile to the City of Lubbock's provided payroll control totals.
❑ As received, employee expense reimbursement requests will be entered into the
recordkeeping system (Frequency to be set by the group).
Individual participant expense reimbursement requests should be filed by the participant
directly with HBI.
HBI's claim documentation review function does not include review or verification of any
items for which the participant is responsible, as defined on our standard expense
reimbursement request form. These include such items as duplicate submissions,
reimbursement from any other source, ineligible dependents, etc.
HBI's claim documentation review does include checking:
the mathematical accuracy of the request;
third party receipt(s) for required items (including name and address of the service
provider, date services were performed, service date within the current plan year,
type of service and amount charged);
that a provider's taxpayer identification number has been included for dependent
care providers; and
that the expense reimbursement request is signed in the name of the participant
(which certifies that the amounts requested have actually been incurred as eligible
plan expenses during the plan year, and that the expenses have not, cannot, and
will not be reimbursed in any other form, be deducted on their income tax return, or
have been previously submitted for reimbursement under this or any other plan).
HealthCare4.19. Bl ss B1ueShield
efits Inc. Texas*
.............. ....... .................................................................... .................. ... &................. ............_...._._................................................_..........................
A Division of Health Care Service Corporation,
Strong • Flexible • Unique a Mutual LgmdReserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
2644.03"99
HBI will forward an explanation of any reimbursement request that cannot be processed as
requested. The explanation will be forwarded to the participant for discussion and/or
resolution.
Determination of each participant's available reimbursement will be made based upon the
year-to-date accrued benefits, expense reimbursement requests submitted and
reimbursements paid. In the case of qualified health care expenses, each participant's
available reimbursement will be based upon the employee's annual enrollment election; the
available reimbursement for dependent care will be determined based upon year-to-date
employee salary reductions and/or accrued employer -contributed benefits. The year-to-
date accrued benefits are determined based upon the employee's annual enrollment
election and the actual employee salary reduction amounts by type of election as follows:
— Premiums
Health Care
Dependent Care
In determining available reimbursements, HBI cannot accept responsibility for late or
Inaccurate participant information.
❑ On a periodic basis, HBI will prepare a check register for use by City of Lubbock in
performing their bank reconciliation.
❑ On a periodic basis, HBI will provide City of Lubbock with updated participant reports for
use in answering employee questions. These include:
— Cumulative reports (Premiums, Health Care, Dependent Care). The quarterly
cumulative reports provide detail by participant regarding year-to-date deductions,
expenses submitted, expenses reimbursed and unreimbursed expenses by benefit
option.
— Election reports:
— Deductions for Current Period
— Total Elections for the Plan Year
— Submissions (current activity)
— Adjustments
— Check Register (current activity)
HealthCare .. B1ueCross B1ueShield
Benefits Inc. of Texas*
_...................._................................_..................._............................._............................................._......................................._......._._...................-.
A Division of Health Care Service Corporation,
Strong • Flexible • Unique a Mutual Legal Reserve company*
9
* Independent Licensees of the Blue Cross and Blue Shield Association
❑ HBI will perform (1) a 25% benefit -concentration discrimination test (key employees), (2) the
dependent care 55% average benefit test (highly compensated employees) and (3) the
dependent care 25% benefit concentration test for more than 5% owners. Based upon the
employee enrollment and other employee information provided by City of Lubbock, HBI will
perform such discrimination tests after completion of the annual enrollment election period
and after the close of the plan year and provide City of Lubbock with the results. To
properly perform these tests, City of Lubbock must provide HBI with key employee, highly
compensated employee, over $25,000 employee, and more than 5% owner information on a
timely basis. (See Optional Services for fee.)
❑ On an annual basis (generally three months prior to the end of the plan year, but to be
determined by City of Lubbock) HBI will prepare and mail to City of Lubbock individual
participant letters reflecting the current status of each plan reimbursement account for
delivery to the participants. Such letter will include year-to-date accrued benefits, expense
reimbursement requests, the cumulative reimbursements, and unused available benefits.
❑ On an annual basis, HBI will provide City of Lubbock with the recordkeeping information
necessary to prepare Form 5500, as well as employee dependent care information which
must be reported on Form W-2.
(See Optional Services for fee.)
❑ On an annual basis, HBI will provide City of Lubbock with updated generic enrollment
materials for distribution by City of Lubbock including an updated generic video and slides, if
appropriate.
All processing will be completed as soon as practical, normally within ten (10) working days of
receipt of complete, accurate participant data from City of Lubbock and/or the Plan
Administrator.
PLEASE NOTE THAT, AS A RESULT OF THE ABOVE PROCEDURES, HBI IS NOT
ACCEPTING, EITHER DIRECTLY OR IMPLIED, THE BURDEN OF VERIFYING THE
PROPRIETY OF THE DOCUMENTATION OR EXPENSES SUBMITTED AND INCURRED,
OTHER THAN AS SPECIFIED IN THIS PROPOSAL.
Healthcare B1ueCross BlueShield
�@ilefets Inc. ���® � of Texas*
..........................................................................................................................................................................................................................................
A Division of Health Care Service Corporation,
Strong • Flexible • Unique a Mutual Legal Reserve Company*
10
* Independent Licensees of the Blue Cross and Blue Shield Association
RESPONSIBILITIES OF THE EMPLOYER AS THE PLAN ADMINISTRATOR
The following list, although not all-inclusive, sets forth a number of functions to be performed by
City of Lubbock:
❑ Provide HBI with initial employee enrollment election information in our pre -approved
format.
❑ Provide HBI with discrimination testing information (e.g. key employee, highly compensated
employee, over $25,000 employee, and more than 5% owner).
❑ As required, pay directly to the appropriate insurance carrier or third party administrators any
"premium" salary reduction amounts.
❑ At the end of each period for which reimbursements will be processed (e.g., monthly),
advise HBI of any (1) new employees, (2) participant data changes (e.g., election changes,
payroll deduction changes, employment status changes), (3) terminated employees, and (4)
adjustments to year-to-date deductions. This information must be provided using a HBI pre -
approved format and must include control totals which HBI can use to reconcile to actual
City of Lubbock payroll deductions for each payroll period.
❑ Prior to the release of the reimbursement checks, transfer to an appropriate bank account
sufficient funds to cover all "health care" and "dependent care" reimbursements.
❑ As required, communicate with all employees regarding reimbursement requests processed
and adjustments (if any) thereto, account balances available, and other employee inquiries,
based upon company payroll information and HBI -provided reports.
❑ As required, notify employees of their rights under C.O.B.R.A.
❑ Periodically, reconcile management reports provided by HBI to the records of City of
Lubbock.
❑ Annually, report dependent care information on employees' Form W -2s.
❑ Annually, complete and file Form 5500 with the Internal Revenue Service.
❑ File the Summary Plan Description with the Department of Labor.
HealthCare B1ueCross B1ueShield
m itS Inc. ��'� ® of Texas*
........................................... ............. .................... «........... ............ «..... ....................................«..........«.........��ay............................................... «.
A Division of Health Care Service Corporation,
Strong • Flexible • Unique aMutual Le Reserve Company*
11
* Indenendenl Licensees of the Blue Cross and Blue Shield Association
FIN
2644.030-399
.I
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STAFFING, TIMING, AND PAYMENT OF FEES
STAFFING
It is HBI's philosophy to assemble a team of consultants and support staff whose expertise and
experience will ensure the successful completion of a project in the most efficient and
cost-effective manner possible. This team, that has been assembled to assist City of Lubbock,
offers extensive experience in flexible benefits and related areas.
TIMING
HBI is prepared to begin the project immediately. Plan Design and Plan Implementation can be
completed within four to six weeks from the start of the project.
FEES
Our fees for the above services assume monthly expense reimbursement request processing
and reporting and documentation review of claims (with a minimum reimbursement amount of
$25 except at Plan year end). Monthly fees are as follows (more frequent processing, and
optional services are available at slightly higher fees):
0 Plan recordkeeping:
Annual set-up fee $689.00
(Section 125 Plans are required to re -enroll every year)
Basic Services:
— Premium account
$176.00 plus $0.22 per
participant per month
Health care reimbursement account *(If the employee
also elects participation in the Premium account, the
"Premium account per participant" fee will be waived
for that employee) $3.48
— Dependent care reimbursement account *(If the
employee also elects participation in the Premium
account, the "Premium account per participant" fee will
be waived for that employee) $3.48
*If an employee elects health care reimbursement and dependent care reimbursement, the
maximum fee for that employee is $3.48.
Healthcare _ . B1ueCross BlueShield
Beneif tS Inc. of Texas*
_
............... .....................---------------- ......... _......... ..... _....... ............................................. ..................�................�y..................................................
A Division of Health Care Service Corporation,
Strong • Flexible • Unique 12 aMutual Le Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
❑ Optional Services:
— Discrimination Testing $992.00
— Preparation of 5500 $1,036.00
— Employee/other presentations Number, location and fees to
be agreed upon.
Plan Document and Implementation $1,654.00
Disclaimer - HealthCare Benefits will not administer a Flexible Spending Plan if the total
participation is less than 25 employees.
Our fees assume that City of Lubbock will provide HBI with employee enrollment information,
census data (name, social security number, address, highly compensated and non -highly
compensated, etc.), status change, or any other appropriate participant data. This data must
be provided in a pre -approved format and on a timely basis. In addition, a fee will be
charged for any change in payroll information which requires HBI to modify its
recordkeeping system after initial set-up.
It is crucial that City of Lubbock provide us with accurate and reconciled data; HBI will not accept
responsibility for errors or added costs incurred because of inaccurate or untimely information
received from City of Lubbock and/or the Plan Administrator. HBI reserves the right to charge,
at our standard billing rates, for any reprocessing, reallocation or amended participant
statements, checks or other reports required because of incomplete or inaccurate
information supplied by City of Lubbock and/or the Plan Administrator.
Any additional charges will be as follows:
Computer $ 45.00 per hour
Recordkeeper $ 50.00 per hour
Consulting on recordkeeping issues $100.00 – $150.00 per hour
Our proposal anticipates the use of our standard formats for elections, submissions, reporting,
check writing, etc. However, we will provide City of Lubbock with the opportunity to make
modifications to these formats. While we anticipate that no additional charges will be required
for minor changes, we will advise City of Lubbock before any such charges are incurred.
Our fees are effective for the current plan year, and are subject to change thereafter upon 30
days prior written notice. They do not include certain direct expenses such as travel expenses,
check and other printing, special postage or express charges. HBI will obtain prior approval from
City of Lubbock, the Plan Administrator, before such expenses are incurred.
HealthCare BlueCross B1ueShield
Benefits lnc: 4.19. of Texas
_........................-................................................................................_......................................................_..........._._....-.................-..............-......._.
A Division of Health Care Service Corporation,
Strong • Flexible • Unique 73 a Mutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
2644M(I-399
PAYMENT OF FEES
Recordkeeping services will be invoiced in advance at the beginning of each month. These and
other fees are due and payable upon presentation.
' City of Lubbock, the Plan Administrator, will hold HBI harmless for the discontinuance of and/or
delay in providing recordkeeping services as a result of late or non-payment of fees. HBI is not
k obligated to refund any deposit or fees for which services have been rendered.
DISCLAIMERS
It shall be the responsibility of the Plan Administrator to ensure compliance with Internal
Revenue Code sections including those governing maximum contributions to tax qualified
reimbursement accounts under Section 125. Also our engagement cannot be relied upon to
disclose errors, irregularities, or illegal acts, including fraud or defalcations that may exist in the
administration of the plan. Further, City of Lubbock the Plan Administrator has the responsibility
for proper recording of transactions and for providing HBI with appropriate and accurate
information as well as complying with all governmental and other requirements of the Plan. As
such, HBI is not liable for any actions taken, or not taken, as directed by, or caused by actions of
City of Lubbock, the Plan Administrator. In addition, our recordkeeping services are not
intended to provide investment, tax, legal or accounting advice and assumes City of Lubbock,
the Plan Administrator, has consulted with such experts, as deemed necessary.
TERMINATION OF SERVICES
This Agreement may be terminated as of the beginning of a month by either party by giving the
other party a written notice at least 90 days in advance of the effective date of such termination.
Such notice from City of Lubbock, the Plan Administrator, must include the name and address of
the new recordkeeper and, if appropriate, the name(s) of the successor Plan Administrator.
OTHER SERVICES
On an hourly and/or pre -approved fee basis, HBI can provide the following services:
❑ Customized administrative manual
❑ Customized employee communications such as handbooks, videos, employee
presentations, election and submission forms, posters, mail -outs, etc.
❑ Plan redesign
❑ Consultation with City of Lubbock regarding resolution of any anti -discrimination issues. (A
Flexible Spending Plan must satisfy anti -discrimination test, and each component (e.g.,
health care, life and dependent care) must also satisfy its own tests.)
HealthCare.. B1ueCrossBlueShield
eflis Inc. '�`® Q9. of Texas*
................................... ........................................ _.............. ............................................................_................................................. ............. ......... ......
A Division of Health Care Service Corporation,
Strong • Flexible • Unique14 a Mutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
22644.0W-399
❑ Assistance to City of Lubbock on matters related to the plan's operation and applicable
Federal and state tax laws pertaining to the Flexible Spending Plan
❑ Preparation of annual Form 5500 or other required reporting forms based upon information
provided by City of Lubbock.
❑ Assistance with C.O.B.R.A. compliance
❑ Representation before IRS in the event of a plan examination
If the above terms are acceptable to you and the services outlined are in accordance with your
understanding, please sign and return a copy of this proposal to us. This proposal is not a
contract until accepted at the home office in Richardson, Texas.
Healthcare B1ueCross BlueShield
Benefits Inc. of Texas*
........................... _............................ ........ _....... _.... ......... _.......................................... ..................................-------------- ....._....... . .... _..... ........ _.... ........
A Division of Health Care Service Corporation,
Strong • Flexible • Unique 15 a Mutual Legal Reserve Company*
* Independent Licensees of the Blue Cross and Blue Shield Association
2644.030,-S,99
i
1xx
READ AND AGREED:
CITY OF LUBBOCK
I have reviewed this proposal for which we agree to engage HealthCare Benefits, Inc.
ACCEPTED BY: ACCEPTED BY:
CITY OF LUBBOCK HealthCare Benefits, Inc.
By: By:
Russell J. Sanderson
Title: Title: President `
Date:
Date: September 28, 1999
HealthCare . _ B1ueCross B1ueShield
Benefits Incof Texas*
........................ _.............. .................... .......... ..................._..................................................................................................................._.... _....... _.......
A Division of Health Care Service Corporation,
Strong • Flexible a Unique 16 a MutualIkoReserve Company
*
* Independent Licensees of the Blue Cross and Blue Shield Association
CORPORATE BANKING RESOLUTION
' (for Deposit Accounts)
Depositor: CITY OF LUBBOCK-HEALTHCARE FLEX Financial American State Bank
PO BOX 2000 Institution: Lubbock -14th & O
LUBBOCK, TX 79457-2000 1401 Avenue O
PO Box 1401
Account No: 10021059 Lubbock, TX 79408-1401
I, the undersigned Secretary of the Corporation named above, HEREBY CERTIFY that the Corporation is organized and existing under and by
virtue of the laws of the state of Texas as a non-profit corporation, with its principal office at 1625 13TH ST, LUBBOCK, TX 79401 -W30 -
Account Holder. CITY OF LUBBOCK-HEALTHCARE FLEX is the complete and correct name of the Account Holder.
FURTHER CERTIFY that at a meeting of the Board of Directors of the Corporation, duly and regularly called and held on October 26, 1999, at which
a quorum was present and voting, the following resolutions were adopted:
RESOLVED, that the Financial Institution named above at any one or more of its offices or branches, be and it hereby is designated as a depository for
the funds of this Corporation, which may be withdrawn on checks, drafts, advices of debit, notes or other orders for the payment of monies bearing the
following appropriate number of signatures: Any one (1) of the following named officers or employees of this Corporation ("Agents'), whose actual
signatures are shown below: --.
-
X
R�SR SAN LTHCARE BENEF 7S
i C /
and that the Financial Institution shall be and is authorized to honor and pay the same whether or not they are payable to bearer or to the individual
order of any Agent or Agents signing the same.
FURTHER RESOLVED, that the Financial Institution is hereby directed to accept and pay without further inquiry any item drawn against any of the
Corporation's accounts with the Financial Institution bearing the signature or signatures of Agents, as authorized above or otherwise, even though
drawn or endorsed to the order of any Agent signing or tendered by such Agent for cashing or in payment of the individual obligation of such Agent or
for deposit to the Agent's personal account, and the Financial Institution shall not be required or be under any obligation to inquire as to the
circumstances of the issue or use of any item signed in accordance with the resolutions contained herein, or the application or disposition of such item
or the proceeds of the item.
FURTHER RESOLVED, that any one of such Agents is authorized to endorse all checks, drafts, notes and other items payable to or owned by this
Corporation for deposit with the Financial Institution, or for collection or discount by the Financial Institution; and to accept drafts and other items
payable at the Financial Institution.
FURTHER RESOLVED, that the above named agents are authorized and empowered to execute such other agreements, including, but not limited to,
special depository agreements and arrangements regarding the manner, conditions, or purposes for which funds, checks, or items of the Corporation
may be deposited, collected, or withdrawn and to perform such other acts as they deem reasonably necessary to cant' out the provisions of these
resolutions.
FURTHER RESOLVED, that the authority hereby conferred upon the above named Agents shall be and remain in full force and effect until written
notice of any amendment or revocation thereof shall have been delivered to and received by the Financial Institution at each location where an account
is maintained. Financial Institution shall be indemnified and held harmless from any loss suffered or any liability incurred by it in continuing to act in
accordance with this resolution. Any such notice shall not affect any items in process at the time notice is given.
I FURTHER CERTIFY that the persons named above occupy the positions set forth opposite their respective names and signatures; that the foregoing
Resolutions now stand of record on the books of the Corporation; at they are in full force and effect and have not been modified in any manner
whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on ,and attest that the signatures set
opposite the names listed above are their genuine signatures.
X
TO AND ATTESTIRD BY:
or
CORPORATE
SEAL
X `✓
"NOTE: In case the Secretary or other certifying officer is designated by the foregoing resolutions as one of the signing officers, this certificate should also be signed by a second
Officer or Director of the Corporation. '
DEPOSIT PRO. Rag. Y.S. Pat. S T.M. OFF., YW. 3.040(c) 1999 CFI P-Sarwcu, Ihc. AN Rights Raaarv90. TX - C:%CFIWIN%CFhT1S1L71$
J
ay ie arne I - e: orporate an ing eso ution Page 1
From:
WILLIAM de. Haas
To:
Kaythie Darnell
Date:
1/31/00 3:20PM
Subject:
Re: Corporate Banking Resolution
1. The contract requires that the City open a bank account and give the authority for someone in the
company to access the account to reimburse our employees in the program.
2. 1 do not see a problem with you signing the document. However, before you do sign you should
ensure that the company has provided us with documentation indicating the person who shall have access
to the account. Andy told me he does have a letter from their corporate secretary.
3. There is an alternative to you signing the document. According to the original resolution passed for this
contract the Mayor has the authority to sign related documents. (Nothing needs to be done except put
the Mayor's signature block on the document.)
>>> Kaythie Darnell 01/31/00 02:25PM >>>
understand from Andy that you said for me to sign this document. Since I have no idea or understand as
to why I might be the one to sign this document, I would like for you to advise me to sign for the City.
believe that this acct may need to be opened today. Please advise, thanks, kd.
CC: Andy Burcham
El