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:
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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.
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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
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(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:
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(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
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(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:
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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."
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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
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