Loading...
HomeMy WebLinkAbout8266RESOLUTION NO. 8266 A RESOLUTION AUTHORIZING THE CITY OF PUEBLO TO ENTER INTO AN AGREEMENT WITH AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS ( AFLAC) TO PROVIDE THE ADMINISTRATION FOR EMPLOYEE SALARY REDUCTION (CAFETERIA PLAN) FOR THE CITY OF PUEBLO EMPLOYEES FOR THE CALENDAR YEAR 1998 WHEREAS, the City of Pueblo provides a salary reduction (Cafeteria Plan) for its employees, and WHEREAS, AFLAC will provide these services to the City of Pueblo for a reduced cost to the employees, and WHEREAS, there will be no additional cost to the City to provide such services in 1998, now therefore BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, COLORADO, that: SECTION 1. The City of Pueblo is authorized to enter into an agreement with AFLAC for a salary reduction (Cafeteria Plan) for the calendar year 1998. SECTION 2. This resolution shall become effective immediately. INTRODUCED: November 10 , 1997 BY: Samuel Corsentino Councilperson ATTEST: APPROVED: City 6erk President the City council i This REIMBURSEMENT SERVICES AGREEMENT Daily Processing Agreement - Other Bank Agreement, effective upon execution for the Plan Year, by and between OF PUEBLO, A MUNICIPAL CORPORATION American Family Life Assurance Company ( "AFLAC") WITNESSETH: WHEREAS, the Employer has adopted a Medical Care Expense Reimbursement ("URM") Plan and /or a Dependent Care Expense Reimbursement ("DDC") Plan for its Employees in conjunction with its Flexible Benefits Plan (collectively referred to as the "Plan" and attached hereto)to be adopted and administered in accordance with Sections 105, 125, and 129 of the Internal Revenue Code of 1986, as amended (the '!Code"); and WHEREAS, the Employer will either function as the Plan Administrator or contract with a duly licensed third party administrator (other than AFLAC). to be the Plan Administrator; and WHEREAS, the Employer desires that AFLAC, as its agent, furnish reimbursement services within a framework of policies, interpreta- tions, rules, practices and procedures (the "reimbursement practices and procedures ") made and established by the Employer and /or Plan Administrator in (i) receiving and processing requests for benefits under the Plan ( "Requests ") and (ii) disbursing benefit payments from Employer funds (as provided for in Section II.A) for eligible expenses under the flexible spending account provisions of the Plan; and WHEREAS, the Employer: i) has established a separate account (the* Account) with a financial institution acceptable to AFLAC for the purpose of holding a portion of its general assets sufficient to facilitate the payment of Plan benefits; and ii) will grant AFLAC withdrawal authority over the Account sufficient to enable AFLAC to draw benefit checks directly of the Account and /or electronically transfer funds from the Account and deposit such Funds into an account maintained by AFLAC (to facilitate the payment of Plan benefits) without further approval of the Employer; WHEREAS, the Employer is to retain all liabilities owed or established under the plan to its Participants, and all responsibilities and liabilities incident to maintaining the Account, (including, but not limited to, Account funding, Account reconciliation, and any service fees associated with the Account), and AFLAC is to provide the agreed upon services to the Plan without assuming any such liability; NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed as follows: -1- A.1 The Employer and /or Plan Administrator shall: (1) respond to all routine inquiries from Employees concerning en- rollment in the Plan, and its terms, conditions and operations;. and (2) notify Plan Participants of their ability to apply for reimburse- ment benefits and supply them with Request forms (to be provided by AFLAC) and Request filing instructions; and (3) provide AFLAC with names, addresses, Social Security Numbers, and elected amounts of all participants in the Plan; and (4) upon the occurrence of events that would change a Participant's status under the Plan (e.g. termination, Change in Family Status, etc.) immediately provide AFLAC with updates (via Telefax which identify eligible Participants in each of the respective reim- bursement Plans and /or the amount of reimbursement benefits for which they are eligible; and (5) immediately inform AFLAC (via Telefax) as to any new Participants in either of the reimbursement Plans, any Change in Family Status affecting a Participant's election, or any Qualified Beneficiary electing coverage under COBRA (and the amount of such election), or of any other change which will affect AFLAC's responsibilities hereunder. B. In determining any person's right to benefits under the Plan, AFLAC shall rely on the eligibility information furnished by the Employer and /or Plan Administrator, and any signed statements by Participants regarding the eligibility of their Requests under the respective Plan. It is mutually understood that the effective performance of this Agreement by AFLAC will require that it be advised on a timely basis by the Employer and /or Plan Administrator during the continuance of this Agreement of the identity of individuals eligible for benefits under each of the respective reimbursement Plans. Information modify- ing a Participant's eligibility or status /election under either Plan shall identify the effective date of eligibility and the termination date of eligibility and shall be provided to AFLAC (via telefax) prior to the effective date of such modification in order to be considered by AFLAC in making benefit determinations hereunder. AFLAC shall not be responsible for Requests paid in error where the Employer has failed to inform AFLAC (in a form and with such information as may reasonably be required by AFLAC) of a Participant's eligibility or status change prior to the release of the benefit payment. -2- A.I The Employer shall: {i) establish the conduit Account at a financial institution acceptable to AFLAC and arrange with the institution for AFLAC to have withdrawal authority over the Account; and make sufficient funds available from its general assets for amounts allocable to eligible reimbursement benefits under its plan by: i) depositing a "Maintenance Deposit" of at least $ {two month's payroll deductions) in the Account; and ii) arranging with the financial institution for overdraft protection for the Account equal to (two month's payroll deductions) to facilitate the timely processing of Requests under the Plan; and grant AFLAC withdrawal authority over the Account sufficient to draw benefit checks directly on the Account and /or electronically transfer funds from the Account and deposit such Funds into an account maintained by AFLAC (to facili- tate the payment of Plan benefits) without further approval of the Employer; (iv) deposit additional funds equal to the benefit payments disbursed during the last Request Processing cycle (or such other amount specified by and at the request of AFLAC) in order to reestablish the Maintenance Deposit at the end of each Request processing cycle (or such earlier time speci- fied by AFLAC). (v) telefax copies of all deposit verification receipts, Account statements, and other correspondence relating to the Account to AFLAC upon receipt from the depository institution. During the term of this Agreement, the Employer shall not withdraw funds from the Account, except at the request of, or to the extent approved by AFLAC. In addition, Employer shall make available such information relating to the Account as is deemed necessary by AFLAC. The Employer bears sole responsibility for ensuring that there are adequate funds in the Account and for reconciling the Account. If, at any time, the amount of reimbursement benefits payable under the applicable Plan provisions exceeds the amount deposited by the Em- ployer in the Account, the Employer shall transfer such amounts to the Account to fulfill its reimbursement obligations under the applicable Plan. AFLAC is under no obligation to advance funds on behalf of the Employer, and is not responsible for any fees imposed by the deposi- tory institution with respect to the Account (including, but not limited to Account maintenance fees, overdraft or insufficient fund fees, fees with respect to voided checks, or Account balance inquiry fees) . WE B in accordance with the terms and conditions of the Plan, and any reimbursement practices and procedures prescribed by the Employer and /or Plan Administrator, AFLAC, as agent for the employer and /or Plan Administrator shall: (1) receive Requests for, and expeditiously review such Requests to determine what amount, if any is due and payable with respect thereto; and (2) disburse the benefit payments it determines to be due from funds deposited by the Employer in the Account (provided the Employer has sufficient funds in the Account) in accordance with the provisions of the plan and the following procedure(s): (i) valid reimbursement for URM and /or DDC benefits shall be paid by AFLAC by mailing a check in the appropriate amount(s) directly to the Participants at their home ad- dresses; and (ii) if the amount of the (otherwise) reimbursable DDC Request exceeds the amount the Participant had withheld for DDC benefits, the excess shall be carried forward (within the same Plan Year) and treated as an Eligible Employment Related Expense for that month; and (iii) if the amount of the reimbursable URM Request exceeds the amount the Participant has had withheld for URM benefits, the entire amount shall be reimbursed provided the employer makes available sufficient funds for AFLAC to satisfy the Request; and (iv) Requests of less than $15.00 may be carried forward and ' aggregated with future Requests until the reimbursable amount is greater than $15.00, provided, however, that the entire amount of the reimbursable Requests shall be paid after the close of the Plan Year without regard to the $15.00 threshold; and (v) disbursements for Requests of $1,000 or more shall be forwarded to the Employer for countersignature and disburse- ment (3) notify claimants as to any Requests which are denied because of inadequate Request substantiation or improper Request form sub- mission and give affected claimants the opportunity to resubmit their Requests; and -4- (4) provide to the claimant within sixty (60) days following receipt of a Request, written notification (A) as to the disposition of the Request, or (B) of an anticipated delay beyond sixty (60) days in the disposition of the Request together with an explana- tion of the delay; and (5) notify the claimant and refer to the Plan Administrator (with an analysis of the issues affecting the Request) for final decision any requests which AFLAC deems not to be reimbursable pursuant to the terms of the Plan and /or the reimbursement practices and procedures established by'the Employer and /or Plan Administrator, setting forth the applicable review procedure available to the claimant through the Plan Administrator; and (6) provide the Employer and /or Plan Administrator with written monthly and year -end reports summarizing the previous period's URM and /or DDC and Account activities with sufficient detail to provide for the audit and control of funds used; and (7) provide the Employer and /or Plan Administrator with the informa- tion needed with respect to the URM and /or DDC Plans for fulfilling annual reporting requirements and the preparation and submission of a Form 5500 Series Annual Report by the Employer and /or Plan Administrator to the Internal Revenue Service. C. (8) with respect to Requests submitted for long -term expenses (e.g., installment contracts for obstetric and orthodontic charges), the Employer as Plan Administrator directs AFLAC to reimburse only -those Requests which are: i) accompanied by substantiation (ac- ceptable to AFLAC) verifying that the medical services relating to the installment payment have been rendered and /or ii) deter- mined by AFLAC to have been incurred after reviewing a proposed treatment plan submitted by the medical service provider. Any long -term Requests submitted without the foregoing substantiation will be returned to the Employer as Plan Administrator for individual adjudication. AFLAC shall not be obligated or responsible for any duty with regard to the administration of the Plan (imposed by the Plan or otherwise) except as specifically provided above. It shall be the Employer and /or Plan Administrator's sole responsibility and duty to: -5- (1) comply with the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended including, but not limited to, providing Covered Employees and Qualified Beneficiaries covered by the URM with initial COBRA notices, notices upon a Qualifying Event, and other information concerning COBRA elections; and (Z) undertake and comply with any Internal Revenue Service require- ments with regard to nondiscrimination as to eligibility and participation in the Plan (including any applicable withholding and /or reporting obligations applicable to the benefits by virtue of the Plan being deemed to be discriminatory); and (3) amend the Plan as necessary to comply with future changes in applicable Internal Revenue or Labor statutes and regulations or other federal, state, or local statutes or regulations; and (4) determine if, and when, a valid Change in Family Status has occurred, determine the appropriate election change, and convey such information to AFLAC; and (5) make a full and fair review of any unpaid Requests as described in II.B.S., above, and required by the Plan and the Employee Retirement Income Security Act of 1974 (" ERISA"), and notify the claimant in writing of its decision on review within the time limits and other ERISA requirements relating thereto; and (6) prepare and submit summary plan descriptions and summary descrip- tions of material modifications to each Employee and to the U.S. Department of Labor as may from time to time be required; and (7) prepare and submit a Summary Annual Report to each Plan Partici- pant as may from time to time be required; and (8) annually prepare a Form 5500 Series Annual Report and submit it to the Internal Revenue Service within seven (7) months after the end of the Plan Year; and (9) submit annual statements to Plan Participants showing the amounts paid and /or expenses incurred as required by the Plan Document and the Code; and -6- (10) take all other actions necessary to maintain and operate the Plan in compliance with applicable provisions of the Plan, ERISA, the Code, and any other applicable state and /or federal law. A. IM C. In the event AFLAC pays any person less than the amount to which he or she is entitled under the Plan, AFLAC will adjust the underpayment at the end of the next reimbursement period for which a total payment of $15.00 would result or at the end of the Plan Year. In the event that AFLAC overpays any person entitled to benefits under the Plan, or pays benefits to any person who is not entitled to them, AFLAC shall take all reasonable steps to recover the overpayment except that AFLAC shall not be required to initiate court proceedings to recover an overpayment. AFLAC shall promptly notify the Employer if it is unsuccessful in recovering any overpayment. In performing its obligations under this Agreement, AFLAC neither assumes nor underwrites any liability of the Employer under the Plan, but, with respect to the Employer and /or Plan Administrator, acts only as provider of those services specifically described in this Agreement and with respect to Plan. Participants, acts only as the agent of the Plan Administrator. The services to be performed by AFLAC shall be ministerial in nature and shall be performed within the framework of policies, interpretations, rules, practices, and procedures made or established by the Employer and /or Plan Administrator. AFLAC shall have no discretionary authority or discretionary control over any assets of the Employer, the Plan, or Plan Participants. AFLAC shall have no duty or obligation to defend any legal action or proceeding brought to recover a Request for Plan Benefits. AFLAC shall, however, make available to the Plan Administrator and its counsel, such evidence relevant to such action or proceeding as AFLAC may have as a result of its processing of the contested benefit determination. Except as otherwise explicitly provided in this Agreement, the Em- ployer shall retain the liability for all Plan benefit Requests and all expenses incident to the Plan and for any and all violations of the Consolidated omnibus Budget Reconciliation Act of 1985 ( "COBRA ") and agrees to indemnify AFLAC for and hold it, its directors, officers, and employees, harmless from all amounts and expenses (including reasonable attorneys fees and court costs) for which AFLAC may become liable: -7- For any state premium, or similar tax, however, denominated, including any penalties and interest payable with respect thereto, assessed against AFLAC on the basis of and /or measured by the amount of Plan benefit funds handled by AFLAC pursuant to this Agreement; In consequence of any acts or omissions by AFLAC, the Plan Administrator, or the Employer (and their employees, agents, or affiliates) arising out of this Agreement, or the admin- istration of the Plan (including those alleged to be a breach of fiduciary duty under ERISA), unless such act or omission is attributable to the negligence of AFLAC or AFLAC's breach of the terms of this agreement. Arising from any legal action or proceeding to recover benefits under the Plan; or For any cost, charge, tax, fine, penalty, however denominated, that may be assessed Plan Administrator, or the Employer for ai ERISA or the Code (including COBRA and /or provisions, provided such violation shall sult) . or interest, against AFLAC, the ay violation of any COBRA - related not be the re- This indemnity shall survive the termination of this Agreement. 0 E AFLAC shall use ordinary and reasonable care in the performance of its duties, but shall not be liable to the Employer and /or Plan Adminis- trator for mistakes of judgment or other actions taken in good faith unless such error results directly from a negligent act of AFLAC, its officers or employees. , AFLAC shall have no duty or obligation with respect to Request incurred prior to the effective date of this Agreement (hereafter "Prior Reimbursement Requests ") and /or Plan Administrator (or other) services arising prior to the effective date of this Agreement regardless of whether such services were /are to be performed prior to or after the effective date of this Agreement (hereafter "Prior Administration "). The Employer and /or Plan Administrator specifically acknowledge(s) and agree(s) that: (i) AFLAC has no responsibility or obligation with respect to Prior Reimbursement Requests and /or Prior Administration; (ii) the Employer and /or Plan Administrator will be responsible for processing Prior Reimbursement Requests (including any run -off Requests submitted after the effective date of this Agreement) and maintaining legally required records of all Prior Reimbursement Requests and Prior Administration sufficient to comply with applicable legal (e.g., IRS substantiation) requirements and (iii) the Employer and /or Plan Administrator agree to indemnify and hold AFLAC harmless for any liability relating to Prior Reimbursement Requests and /or Prior Administration." -8- A. B The Employer shall pay AFLAC a fee for services performed under this Agreement in the amount of $ 2.00 per Participant with a minimum monthly fee of $15.00 for the reimbursement Plans for which services are rendered. This amount shall be due by the tenth (10th) of each month (or portion thereof) for which this Agreement is in effect and is in addition to and separate from (i) any Account Establishment (or "Set Up ") fee assessed by AFLAC of $0.00 to initiate the reimbursement arrangement: and (ii) the Employers obligation to make available sufficient funds to satisfy its obligations under the Plan and to adequately fund the Account to satisfy benefit disbursement in accor- dance with section II.A. above. The Employer is responsible for paying the Service Fee to AFLAC. AFLAC is not authorized to withdraw the Service Fee from the Account. Failure to pay any applicable monthly service Fee by the next monthly Requests processing cycle shall result in a cessation of Request processing services until such fees are received by AFLAC. If Request processing services are pended for an entire monthly processing cycle, AFLAC may terminate this Agreement in accordance with Section VI. AFLAC may revise the Service Fee for services performed under this Agreement effective on each Anniversary Date of this Agreement by giving the Employer written notice of the revised rate at least ninety (90) days prior to the applicable Anniversary Date. Section V. Term of Agreement The initial term of this Agreement shall be the initial Plan Year commencing on the effective date hereof, thereafter, this Agreement will automatically renew for successive periods of twelve (12) months unless, at'least ninety (90) days prior to the end of the then current term, the Employer or AFLAC gives written notice to the other of its intention not tofrenew the Agreement. A.� This Agreement shall terminate upon the earliest of the following dates. (1) The end of a term of the Agreement following the delivery of written notice of termination pursuant to Section V. WE (2) At the option of AFLAC, the date upon which the Employer fails to: i) transfer sufficient funds to the Account (upon request by AFLAC) to pay all valid Requests pending under the Plan; or ii) to pay the Service Fee (as provided in Section II.A and IV.A., above). AFLAC shall promptly communicate its election of this .option to the Employer. (3) At the option of AFLAC, if no Plan Participant is an AFLAC policyholder. AFLAC shall immediately communicate its election of this option to the Employer. (4) Any other date mutually agreeable to the Employer and AFLAC. B. Upon termination of this Agreement, AFLAC shall cease the processing of all Requests then in its possession, return any undistributed funds to the Employer, and make all records relating to Requests in process reasonably available to the Employer. If the termination occurs pursuant to VI.A.1 (above), AFLAC shall process all run -off claims provided any Service fee(s) is current. Thereafter, the Employer and /or Plan Administrator shall be responsible for all aspects of Reimbursement Requests processing and Plan administration. (1) Notices. Any notice required to be given hereunder to AFLAC shall be sufficient if in writing and delivered personally or by prepaid first class mail to AFLAC, Flexible Benefits Division, 1932 Wynnton Road, Columbus, GA, 31999, or if to Employer, at the address of the Employer denoted on the signature page attached hereto. (2) Aoblicable Law. This Agreement shall be governed by, and shall be construed in accordance with the laws of the State of Colorado, to the extent they are not preempted by ERISA, the Code, or any other federal law. (3) Legal and Tax Status. nor a named fiduciary Employer shall be the legal and tax status AFLAC shall have no modify any terms or c (4) Assignment. This successor to the purchase of asset the Employer. T tion into which t be consolidated, tially all of th e AFLAC is neither the Plan Administrator, of the Plan, and it is understood that the sole party responsible for determining the of the Plan and Account under applicable law power or authority to waive, alter, breach or onditions of the Plan. Agreement may be assigned by AFLAC to any business of AFLAC by merger, consolidation, s, or otherwise, without the prior consent of his Agreement shall be binding upon any corpora - he Employer may be merged or with which it may or any corporation succeeding to all or substan- business of the Employer. -10- (5) Entire Contract. This Agreement constitutes the entire contract between the parties and no modification or amendment hereto shall be valid unless in writing and signed by an officer of the Employer and an Officer of duly authorized representative of AFLAC. (b) Tax Reporting and withholdings. The Employer has ultimate control over the payment of Plan benefits and shall be the sole party responsible for income and employment tax reporting and withholding obligations imposed as a result of the includability of such payments in the gross income of recipients. AFLAC is a mere agent of the Employer for the processing of benefit Re- quests. (7) Capitalized Terms shall have the same meaning as in the Plan documents. INIWITNESS WHEREOF, the parties hereto have caused this Agreement executed in duplicate and signed by an Officer of the Employer and Officer or duly authorized Home Office Employee of AFLAC to do so. Dated at 0 At" American Family Life Assurance This B Cheryl M. Moss Second Vice President Diiector of Administration /Compliance Dated e d at Ci of P IIR113 n This 15th day By rresidere of &be City Council St. eet Address: #1 City Hall Place Pueblo, CO 81003 9� of January , 19 9 to be an Company -11-