HomeMy WebLinkAboutAGENDA REPORT 2004 1215 CC SPC ITEM 04AITEM `4 .A
CITY OF MOORPARK, CALIFORNIA
City Council Meeting
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AGENDA REPORT --Al.
BY:
TO:
Honorable
City Council
FROM:
Deborah S.
Traffenstedt, ATCM /City Clerk
DATE: December 14, 2004 (CC Special Meeting of 12/15/04)
SUBJECT: Consider Resolution Establishing a City of Moorpark
Section 125 Premium Only Plan for Medical Insurance
for City Employees and Members of the City Council
Eligible to Receive Medical Insurance Benefits
BACKGROUND
A Section 125 Premium Only Plan (POP) for Medical Insurance is
proposed to be created to implement the medical insurance
benefit program adopted by the City Council pursuant to the
following: 1) The current Memorandum of Agreement (MOA) by and
between the City of Moorpark and Service Employees International
Union AFL -CIO, CLC, Local 998, for competitive service
employees; 2) Management employee benefits established by City
Council Resolution No. 2004 -2220; and 3) Ordinance No. 307
(which amended Section 2.04.055 of Chapter 2.04, Title 2, of the
Moorpark Municipal Code to add the following language to the end
of Section 2.04.055: Effective January 1, 2005, all sitting
councilmembers shall be entitled to the same health insurance
and life insurance benefits afforded the city's competitive
service employees as such benefits exist on January 1, 2005, and
as such may be amended from time to time for the city's
competitive service employees).
DISCUSSION
A draft resolution is attached to this staff report, which
includes the proposed Section 125 POP document. The Section 125
POP is intended to qualify as a "Cafeteria Plan" under Section
125 of the Internal Revenue Code of 1986, as amended. Since the
MOA and Management Benefits Resolution, referenced above,
provide the "in- lieu" payment (flex dollars) for medical
Honorable City Council
December 15, 2004, Special Meeting
Page 2
insurance, only, the POP has been written to reflect the current
benefit plan.
Staff has been working with a consultant, ABD Insurance &
Financial Services, on the preparation of the draft Section 125
POP document. Final language approval by both the City Manager
and City Attorney is requested to allow any final edits to be
made to ensure compliance with legal requirements and the City
Council approved benefit program.
STAFF RECOMMENDATION
Adopt Resolution No. 2004- subject to final language
approval by the City Manager and City Attorney.
Attachments: Draft Resolution
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MOORPARK, CALIFORNIA, ESTABLISHING A CITY
OF MOORPARK SECTION 125 PREMIUM ONLY PLAN FOR
MEDICAL INSURANCE FOR CITY EMPLOYEES AND
MEMBERS OF THE CITY COUNCIL ELIGIBLE TO
RECEIVE MEDICAL INSURANCE BENEFITS
WHEREAS, Section 125 of the Internal Revenue Code allows for
the deduction of benefit premiums on a pre -tax basis; and
WHEREAS, a City of Moorpark Section 125 Premium Only Plan
(POP) is proposed to be established for medical insurance
consistent with the current Memorandum of Agreement by and between
the City of Moorpark and Service Employees International Union AFL -
CIO, CLC, Local 998, for competitive service employees; Management
employee benefits established by City Council Resolution No. 2004-
2220; and Ordinance No. 307, which entitles all sitting
Councilmembers to the same health insurance benefits afforded the
City's competitive service employees as such benefits exist on
January 1, 2005, and as such may be amended from time to time.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The City Council hereby adopts the City of
Moorpark Section 125 POP, attached to this resolution and
incorporated herein by reference, effective January 1, 2005.
SECTION 2. The City Clerk shall certify to the adoption of
this resolution and shall cause a certified resolution to be filed
in the book of original resolutions.
PASSED AND ADOPTED this 15th day of December, 2004.
Patrick Hunter, Mayor
ATTEST:
Deborah S. Traffenstedt, City Clerk
Attachment: City of Moorpark Section 125 Premium Only Plan
9000ll.
CITY OF MOORPARK
PLAN DOCUMENT
SECTION 125
EIN: 95- 3860962
100004
CITY OF MOORPARK
TABLE OF CONTENTS
Paae
STATEMENT OF PURPOSE 1
ARTICLE
I. DEFINITIONS
1.1
Administrator ................................. ...............................
2
1.2
Anniversary Date ............................ ...............................
2
1.3
Benefits ........................................ ...............................
2
1.4
City ............................................... ...............................
2
1.5
Code ............................................ ...............................
2
1.6
Compensation ................................ ...............................
2
1.7
Council ......................................... ...............................
2
1.8
Dependent .................................... ...............................
2
1.9
Dependent Premiums ..................... ...............................
2
1.10
Effective Date ................................ ...............................
2
1.11
Election Periods ............................. ...............................
2
1.12
Eligible Employee ........................... ...............................
3
1.13
Employee ...................................... ...............................
3
1.14
Employer ...................................... ...............................
3
1.15
Flex Dollars ................................... ...............................
3
1.16
Highly Compensated Employee ........ ...............................
3
1.17
Initial Election Period ....................... ...............................
3
1.18
Insurance Company .......................... ...............................
3
1.19
Optional Benefit Coverages .............. ...............................
3
1.20
Participant ....................................... ...............................
3
1.21
Period of Coverage ......................... ...............................
3
1.22
Plan ............................................. ...............................
3
1.23
Plan Administrator ........................... ...............................
4
1.24
Plan Year ....................................... ...............................
4
1.25
Salary Reduction ................................ ...............................
4
II. ELIGIBILITY AND PARTICIPATION
2.1 Eligibility .......................................... ............................... 5
2.2 Entry Date ........................................ ............................... 5
2.3 Employee Election ............................. ............................... 5
2.4 Election Periods ................................ ............................... 5
2.5 Termination of Participation ................. ............................... 6
2.6 Termination of Employment ................. ............................... 6
f)00 05
IV
V.
VI.
VII
OPTIONAL BENEFIT COVERAGES
3.1 Coverage Options ............................. ............................... 7
3.2 Description of Optional Benefit Coverages ............................ 7
3.3 Election of Optional Benefit Coverages in Lieu of Cash ............ 7
ELECTIONS
4.1
Election Procedure
8
4.2
............................. ...............................
Timing of Salary Reductions
4.3
................. ...............................
Initial Elections
8
4.4
................................... ...............................
Failure to Return Election Forms ............ ...............................
8
9
4.5
Irrevocable Nature of Salary Reduction Selected ......................
9
4.6
Status Change: Ability to Change Elections .............................
10
4.7
Consistency Rules ............................... ...............................
12
4.8
Changes by Administrator
4.9
..................... ...............................
Adjustment of Compensation Reductions .. ...............................
13
13
4.10
Maximum Elective Contributions .............. ...............................
13
4.11
Cessation of Required Contributions .......... ...............................
13
4.12
Coordination with FMLA
13
......................... ...............................
FLEX DOLLARS AND ADDITIONAL CASH BENEFITS
5.1 Flex Dollars .......................................... ............................... 14
5.2 Allocation of Flex Dollars ......................... ............................... 14
5.3 Waiver of Coverage Cash Option .............. ............................... 14
NON - DISCRIMINATION
6.1 Intent ......................................... ............................... ...... 15
6.2 Reduction of Benefits and /or Contributions . ............................... 15
6.3 Treatment of Contribution Reductions ........ ............................... 15
ADMINISTRATION
7.1
Appointment of Administrator ...................
16
7.2
...............................
Duties of the Administrator
7.3
...................... ...............................
Reports and Records
16
7.4
............................. ...............................
Fiduciary Responsibilities
17
7.5
....................... ...............................
Indemnification of the Administrator
17
7.6
........... ...............................
Administrator Limitations
17
......................... ...............................
17
VIII. AMENDMENT AND TERMINATION OF THE PLAN
8.1 Amendment .......................................... ............................... 18
8.2 Termination .......................................... ............................... 18
8.3 Rights of Participants .............................. ............................... 18
IX. MISCELLANEOUS
9.1
Indemnification ..................................... ...............................
19
9.2
Funding ............................................... ...............................
19
9.3
No Effect on Other Employee Considerations .............................
19
9.4
Titles and Headings ................................ ...............................
20
9.5
Gender and Number ............................... ...............................
20
9.6
Amendments in Writing ........................... ...............................
20
9.7
Separate Provisions ................................ ...............................
20
9.8
Plan Number ......................................... ...............................
20
9.9
City Information .............................. ...............................
20
9.10
Service of Legal Process .......................... ...............................
20
X. SCHEDULE A - OPTIONAL BENEFIT COVERAGES ........................... 21
XI. SCHEDULE B — FLEX - DOLLAR ALLOWANCE SCHEDULE .................. 22
XII. EXECUTION PAGE ........................................... ............................... 23
900901 -1
STATEMENT OF PURPOSE
This Plan Document amends, restates and continues the City of Moorpark 125 Premium Only
Plan (POP), originally effective January 1, 2005. The purpose of this Plan is to provide
Participants with a choice between cash and optional benefit coverages.
This Plan is intended to qualify as a "Cafeteria Plan" under Section 125 of the Internal
Revenue Code of 1986, as amended, and is to be interpreted in a manner consistent with the
requirements of Section 125.
ARTICLE I
DEFINITIONS
Whenever used here in, the following terms have the following meaning unless a different
meaning is clearly required by the context:
1.1 Administrator: The Administrator shall be the City of Moorpark or whom the City
appoints to act on its behalf.
1.2 Anniversary Date: The annual recurrence of the first day of the Plan Year.
1.3 Benefits: Benefits shall mean any benefit provided by the City of which a Participant
may choose.
1.4 City: City shall mean the City of Moorpark.
1.5 Code: Code shall mean the Internal Revenue Code of 1986, as amended, and all
regulations issued thereafter, and replacements from time to time.
1.6 Compensation: Compensation shall mean total remuneration received by a
Participant, including but not limited to wages, salary, overtime, bonuses, any other
payment which is not an advance, loan or expense reimbursement. Each Participant's
compensation shall be determined prior to taking into account Participant's Salary
Reduction Contributions under the Plan.
1.7 Council: Council shall mean the elected members of the City Council of the City of
Moorpark, as constituted from time to time.
1.8 Dependent: Dependent shall mean any individual as defined under Section 152 of the
Code, as amended from time to time and domestic partners as defined in Section 1.11
of this Agreement.
1.9 Dependent Premiums: Dependent premiums shall mean the amount of premium
charged for dependent coverage under the City's group insurance plans.
1.10 Effective Date: Effective date shall mean the date that this Plan becomes effective,
which is January 1, 2005.
1.11 Election Periods: Election periods shall mean the period of time as determined in the
Plan in which a Participant or employee may enter, change, or terminate from the
Plan. The Initial Election Period shall be the thirty (30) days after the date of hire, to
complete the necessary forms to elect the benefits desired within the Plan. This Initial
Election Period may be extended by the Administrator, at its sole discretion upon
2 1)00 09
written notice to employees. The annual election period shall be the month
immediately preceding the Anniversary Date of the Plan, during which an eligible
employee may make an election pursuant to Section 3.3.
1.12 Eligible Employee: Eligible employee shall mean any regular full -time employees,
regular part-time employees, and city council members, who have satisfied the
eligibility requirements under the Plan and who participate in the City's medical
insurance program. Independent contractors and City employees not participating in
the City's medical insurance program shall not be deemed eligible employees.
1.13 Employee: Employee shall mean a person employed by the Employer under common
law rules applicable in determining employer /employee relationships. Independent
contractors shall not be deemed employees.
1.14 Employer: Employer shall mean the City of Moorpark.
1.15 "Flex Dollars ": Flex Dollars shall mean benefit credits or benefit dollars provided to a
participant by his or her Employer, which may be applied towards the cost of Optional
Benefit Coverages.
1.16 Highly Compensated Employee: Highly Compensated Employee means any employee
who is either: (1) an officer; (2) receiving compensation above the Section 414 limit for
the applicable year; (3) receiving compensation above the Section 414 limit for the
applicable year and in the highest 20% of all employees; (4) a spouse or dependent of
a highly compensated employee; or (5) meeting any other definition under Section
414(q) of the Code.
1.17 Initial Election Period: The Initial Election Period shall be first of the month following
date of hire. This Initial Election Period may be extended by the Administrator, as its
sole discretion, upon written notice to employees.
1.18 Insurance Company: Insurance company, or insurance carrier, or insurer shall mean
any insurance company that underwrites and has a contract with the City for a benefit
under this Plan.
1.19 Optional Benefit Coverages: Optional Benefit Coverages are coverages available to
the Participant under the Plans of the City.
1.20 Participant: Participant is any eligible employee who elects to participate in the plan.
1.21 Period of Coverage: Period of Coverage shall mean a Plan Year.
1.22 Plan: Plan shall mean the City's Section 125 Plan.
1.23 Plan Administrator: The Plan Administrator is the City of Moorpark who may, according
to local regulations delegate the administration and management of the Plan as
appointed by the City.
3 100 910
1.24 Plan Year: Plan Year means the period beginning January 1 and ending December
31. All Plan Years shall begin on January 1 and end on December 31, unless
otherwise changed by the City or the Administrator.
1.25 Salary Reduction Contributions: Salary reductions shall mean the amount that each
Participant has authorized the City to reduce his or her compensation in order for it to
be contributed to the Plan to provide the benefits selected by Participants. The
amount of Salary Reduction Contributions shall be designated on the Salary Reduction
Agreement.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 Eligibility:
All employees shall become eligible to be a Participant in the Plan upon satisfying the
following requirements of Sections (A) and (B) below:
(A) Employment Status:
Eligible employee shall mean any regular full -time employees, regular part-time employees,
and city council members, who have satisfied the eligibility requirements under the Plan and
who participate in the City's medical insurance program. Independent contractors and City
employees not participating in the City's medical insurance program shall not be deemed
eligible employees.
(B) Service Conditions:
All eligible employees can participate in the Plan on the first day of the month
following date of hire.
2.2 Entry Date:
All eligible employees shall become Participants in this Plan on the first day of the
month following the date eligibility requirements are met.
2.3 Employee Election:
All employees who meet the eligibility requirements as set forth above may then elect,
during the appropriate Election Period, to become a Participant by completing the
"Salary Reduction Agreement ". This form designates whether the employee desires to
elect the benefits of the Plan.
2.4 Election Periods:
(A) Initial Election Period:
All employees who meet the eligibility requirements as listed above, have a
thirty (30) day election period to select plans offered by they City; and a thirty
(30) day election period after their date of hire to make an election under one of
the Plans offered by the City. Employees must complete the necessary forms
to elect the benefits that they desire within the Plan. This Initial Election Period
may be extended by the Administrator, at its sole discretion, upon written notice
to employees.
(B) Annual Election Periods: After the Initial Election Period, Participants may elect
to change, modify, decrease, or increase their benefits during only one Election
Period, which shall be the month immediately preceding the Anniversary Date
of the Plan. Participants must complete a new Salary Reduction Agreement as
described in Section 2.3 above in order to have changes become effective.
2.5 Termination of Participation:
A Participant shall remain a Participant in the Plan. until the occurrence of one or more
of the following:
(A) Participant ceases to be eligible to participate in Plan;
(B) Participant's employment is terminated;
(C) Participant's death;
(D) The termination of this Plan;
(E) Participant elects not to participate under section 4.4 (d).
2.6 Termination of Employment:
If a Participant's employment is terminated, then all contributions to the Plan shall
cease upon the termination date, the Participant shall no longer be considered a
Participant effective on the date of termination.
However, a Participant may still be eligible for certain benefits in accordance with the
terms of the City's medical plan for which premiums have been paid on Participant's
behalf. The continuation of any benefits is governed solely by the terms and
provisions of the City's group insurance plan and applicable law.
ARTICLE III
OPTIONAL BENEFIT COVERAGES
3.1 Coverage options. Each Participant may choose under this Plan to receive his or her
regular compensation in cash, plus any Flex Dollars or any additional cash benefits to
the extent available under Article V, or to have a portion of it applied by the City toward
the cost of the Optional Benefit Coverages available to the Participant.
Notwithstanding anything herein to the contrary, Optional Benefit Coverages shall be
limited to coverages and benefits available under the plans identified in Schedule A.
3.2 Description of Optional Benefit Coverages. While the election of one or more of the
Optional Benefit Coverages may be made under this Plan, the coverages and benefits
thereunder will be provided not by this Plan but by the plans identified in Schedule A,
the requirements for participating in such plans, and the other terms and conditions of
coverage and benefits under such plans are set forth from time to time in the plans
identified in Schedule A, and in any group insurance contracts and prepaid health plan
contracts that constitute (or are incorporated by reference in) certain of those plans.
The benefit descriptions in such plans, as in effect from time to time, are hereby
incorporated by reference into this Plan.
3.3 Election of Optional Benefit Coverages in Lieu of Cash A Participant may elect under
this Plan to receive one or more of the Optional Benefit Coverages described in
Section 3.2, to the extent available to the Participant under the applicable plans
identified on Schedule A, in accordance with the procedures described in Sections 4.1,
4.2 and 4.3.
(A) If a Participant elects coverage for a Period of Coverage under a plan identified
on Schedule A, and if the Participant is required under such plan to pay a share
of the cost of such coverage, such share shall be paid by the Participant.
Payment shall first be from the Participant's Flex Dollars, as provided in Section
5.2, and second by means of a reduction in the Participant's regular
compensation for the Period of Coverage for the balance of the cost of each
coverage elected.
7 900914
ARTICLE IV
ELECTIONS
4.1 Election Procedure. Prior to the commencement of each Period of Coverage, the
Administrator shall provide one or more written election forms and Salary Reduction
Agreements to each Participant and to each other individual who is expected to
become a Participant at the beginning of the applicable Period of Coverage. The
election forms shall be effective as the first day of the Period of Coverage. Each
Participant who desires to elect an Optional Benefit Coverage available for the Period
of Coverage shall so specify on the appropriate election form or forms and shall agree
to a reduction in his or her compensation.
(A) The amount of the reduction in the Participant's compensation for the Period of
Coverage for coverage under a plan identified as an Optional Benefit Coverage
on Schedule A shall equal the Participant's share of the cost of such coverage,
reduced by the amounts paid from the Participant's Flex Dollars under Section
5.2
(B) The amount of contributions shall change according to the schedule of
premiums for the City's group benefits and the benefit contribution amount
approved by the City Council. A Participant's Salary Reduction Agreement
could automatically increase or decrease, depending upon the change in
premiums of that particular benefit offered by the City, or increase or decrease
depending upon the amount of the Participant's required contribution for
benefits.
Each election form must be completed and returned to the Administrator on or before
such date as the Administrator shall specify, which date shall be no later than the
beginning of the first pay period for which the participant's compensation reduction
agreement will apply.
4.2 Salary Reduction Agreements
Each Participant shall complete a Salary Reduction Agreement at the Initial Election
Period. In all following years, if a Participant desires to change the amount of the
election, enroll in the Plan, or terminate from the Plan, a new Salary Reduction
Agreement must be completed within the month immediately preceding the
Anniversary date of the Plan. This period of time shall be known as the Annual
Election Period.
4.3 Initial Elections:
(A) An eligible employee, as defined in Section 2.1 of this Plan, who is not a
Participant prior to the effective date of the Plan, has the month immediately
8 1)()()'.91.5
preceding the effective date of this Plan to elect their desired benefits for the
Current Plan Year. Such election is made by completing the Salary Reduction
Agreement and other necessary forms as deemed by the Administrator. The
Administrator may choose to extend this period, at its sole discretion, in order to
assist the City's employees in determining whether to participate in this Plan.
(B) The initial election shall adhere to the Initial Plan Year.
4.4 Failure to Return Election Forms:
(A) A new Participant's failure to return a completed election form under Section
4.1,4.2, or 4.3 to the Administrator on or before the specified due date for the
Period of Coverage in which he or she becomes a Participant with respect to
the benefits available for that Period of Coverage shall be deemed to have
elected to participate in the Premium Only Plan and an agreement to a
reduction in the Participant's compensation for the subsequent Period of
Coverage equal to the Participant share of each such coverage for the Period of
Coverage, reduced by the amounts paid from the Participant's Flex Dollars (if
any) under Section 5.2.
(B) An existing Participant's failure to return a completed election form to the
Administrator relating to coverage under a plan identified as an Optional Benefit
Coverage on Schedule A on or before the specified due date for any
subsequent Period of Coverage shall be deemed to constitute (1) a re- election
of the same coverage or coverages, if any, under such plans as were in effect
just prior to the end of the preceding Period of Coverage (to the extent such
coverage remains available as an Optional Benefit Coverage under the Plan),
and (2) an agreement to a reduction in the Participant's compensation for the
subsequent Period of Coverage equal to the Participant share of each such
coverage for the Period of Coverage, reduced by the amounts paid from the
Participant's Flex Dollars (if any) under Section 5.2.
(C) Participants may voluntarily terminate their participation in the Plan, but only
during an Annual Election Period. If a Participant elects not to participate for
the Plan Year applicable for the Annual Election Period, then that Participant
cannot elect to reenter the Plan until the next Annual Election Period, unless a
Family Status Change as defined in Section 4.6 occurs or there is a mid -plan
year change in the benefits offered through this Plan.
4.5 Irrevocable Nature of Salary Reduction Selected:
(A) A Participant's election of the amount of the Salary Reduction Contributions
shall be irrevocable during the Plan Year.
(B) Participants can change, modify, decrease or increase their Salary Reduction
Contributions, only if a Status Change as defined in Section 4.6 has occurred, a
change has occurred in the City's group benefits offered to its employees, or a
9 ;y00916
change has occurred in the amount of contribution for the plan's benefits as
required by the City during the Plan Year. If such a change has occurred, then
the Participant must submit to the Administrator a completed new Salary
Reduction Agreement in order to have the change be effective at the beginning
of the following payroll period.
(C) The Employer and /or the Administrator cannot change any amount of the
Salary Reduction Contributions selected by each Participant during the Plan
Year, unless a termination has occurred as defined under Section 2.5 or 2.6 of
this Plan, or a Status Change has occurred, or a change has occurred in the
City's group benefits offered to its employees, or a change has occurred in the
amount of contribution for the plan's benefits as required by the City.
4.6 Status Change: Ability to Change Elections
(A) A Participant's election made under the Plan (including an election made
through inaction under Section 4.4, shall be irrevocable by the Participant
during the Period of Coverage except as otherwise provided in (1) through (6)
below. A Participant may revoke an election in writing for the balance of the
Period of Coverage and, if desired, file a new election in writing if, under the
facts and circumstances, a change in status occurs, and the requested
revocation and new election satisfies the applicable consistency requirements
in Section 4.7 hereof.
Application for such change must be made within 30 days of the actual event. For this
purpose, a change in status includes the following events:
1. Legal Marital Status. Events that change a Participant's legal marital
status, including marriage, death of spouse, divorce, legal separation,
or annulment.
2. Number of Dependents: Events that change the Participants number
of Dependents (as defined in Code Section 152), including birth,
adoption, placement for adoption (as defined in Regulations under
Code Section 9801), or death of a dependent.
3. Employment Status. Any of the following events that change the
employment status of the employee, employee's spouse, or the
employee's dependent: a termination or commencement of
employment; a strike or lockout; a commencement of or return from
an unpaid leave of absence; and a change in worksite. In addition, if
the eligibility conditions of the cafeteria plan or other employee
benefit plan of the employer of the employee, spouse or dependent
depend on the employment status of that individual and there is a
change in that individual's employment status with the consequence
that the individual becomes (or ceases to be) eligible under the plan,
10 900011,1_1
then that change constitutes a change of employment under this
paragraph.
4. Requirements For Unmarried Dependents: An event that causes a
Participant's dependent to satisfy or cease to satisfy the requirements
for coverage due to attainment of age, student status, or any similar
circumstance as provided in any accident or health plan identified in
Schedule A under which the Participant received coverage.
5. Residence or Worksite. A change in the place of residence or work of
the Participant or the Participant's spouse or dependent.
6. Enrollment in Health Coverage. A significant change in the health
coverage of the Participant or the Participant's spouse attributable to
the spouse's employment, and such other events that the
Administrator determines will permit the revocation of an election
(and, if applicable, the filing of a new election) during a Period of
Coverage under regulations and rulings of the Internal Revenue
Service.
(B) In order to revoke an election or file a new election under this subsection, a
Participant must submit a written application within 30 days of the change in
status.
(C) In the case of coverage under a plan identified in Schedule A, a Participant may
revoke an election in writing for the balance of the Period of Coverage and file a
new election in writing that corresponds with the special enrollment rights
provided in Code Section 9801(f), whether or not the change in election is
permitted under Section 4.6 above.
(D) In the case of a judgement, decree or order resulting from a divorce, legal
separation, annulment, or change in legal custody (including a Qualified
Medical Child Support Order) that requires accident or health coverage for a
Participant's child, a Participant may change his or her election (1) to provide
coverage for the child under a health plan identified in Schedule A if the order
so requires, or (2) to cancel coverage under a health plan identified in Schedule
A for the Participant's child if such order requires the Participant's former
spouse to provide coverage.
(E) In the case of coverage under a health plan identified in Schedule A, a
Participant may revoke an election in writing for the balance of the Period of
Coverage and file a new election in writing to effectively cancel such health plan
coverage for the Participant and /or the Participant's spouse or dependent to the
extent that such individual become entitled to coverage under Part A or Part B
of Title XVIII of the Social Security Action (Medicare) or Title XIX of the Social
Security Act (Medicaid), other than coverage consisting solely of benefits under
Section 1928 of the Social Security Act (the program for distribution of pediatric
11 90091S
vaccines). In addition, if an employee, spouse or dependent who has been
entitled to such coverage under Medicare, Medicaid, or a state program under
the State Children Health Insurance Program ( SCHIP) loses eligibility for such
coverage, the cafeteria plan may permit the employee to make a prospective
election to commence or increase coverage of that employee, spouse, or
dependent under the accident or health plan. A Participant may not revoke his
election if he becomes eligible for SCHIP coverage during the year.
(F) In the case of coverage under a health plan identified in Schedule A which is
provided by an independent third -party provider, if:
The Participant's share of the cost of such coverage significantly
increases or decreases as a result of a significant cost increase or
decrease by the independent third -party provider, or
2. Such coverage ceases or is significantly curtailed, the Administrator may
permit all Participants electing such coverage for the Period of Coverage,
to revoke their elections for the balance of the Period of Coverage, and
to complete a new Salary Reduction Agreement, provided that similar
coverage is elected under a health plan identified in Schedule A for the
balance of the Period of Coverage, in the event that similar coverage is
not available to the Participant, the Participant may revoke his election
for the remainder of the Plan Year.
(G) Any revocation and new election under this Section 4.6 shall be effective at
such time as the Administrator shall prescribe, but not earlier than the first pay
period beginning after the revocation and new election, unless otherwise
required by law.
4.7 Consistency Rules.
A Participant's requested written revocation and new election will be consistent with a
change in status described in Section 4.6 if, and only if, (1) the change in status results
in the Participant, or the Participant's spouse or dependent, gaining or losing eligibility
for accident or health coverage under either the Plan or a plan of the spouse's or
dependent's employer, and (2) the election change corresponds with that gain or loss
of coverage.
Notwithstanding anything in this Section 4.7 to the contrary, if the Participant, or the
Participant's spouse or dependent, becomes eligible for continuation coverage under a
health plan identified in Schedule A as provided in Code Section 49806 or any similar
state law, the Participant may elect to reduce his or her regular compensation under
the Plan in order to pay for the continuation coverage.
4.8 Changes by Administrator. If the Administrator determines, before or during any year,
that the Plan may fail to satisfy for such year any nondiscrimination or other
requirement imposed by the Code or any limitation on benefits provided to the Highly
12 1)'091-9
Compensated Employees, the Administrator shall take such action as the
Administrator deems appropriate, under rules uniformly applicable to similarly situated
Participants, to assure compliance with such requirement or limitation. Such action
may include, without limitation, a modification of elections by Highly Compensated
Employees (as defined by the Code for purposes of the nondiscrimination requirement
in question) without the consent of such Employees.
4.9 Adjustment of Compensation Reductions. If the cost of Optional Benefit Coverages
provided by an independent third -party provider under a medical plan identified in
Schedule A increases or decreases during a Period of Coverage, a corresponding
change shall be made in the compensation reductions of all Participants receiving
such coverage in an amount to be determined by the Administrator.
4.10 Maximum elective contributions. The maximum amount of elective contributions under
the Plan for any Participant shall be the total cost to the Participant for the Period of
Coverage of the most expensive Optional Benefit Coverages that any Participant could
elect.
4.11 Cessation of required contributions. Nothing in this Plan shall prevent the cessation of
coverage or benefits under any plan identified on Schedule A, in accordance with the
terms of such plan, on account of a Participant's failure to pay the Participant's share
of the cost of such coverage or benefits, through compensation reduction or otherwise.
4.12 Coordination with FMLA. Notwithstanding any other provision of this Plan, the
Administrator may (a) permit a Participant to revoke (and subsequently reinstate) his
or her election of one or more Optional Benefit Coverages under the Plan, and (b)
adjust a Participant's compensation reduction as a result of a revocation or
reinstatement to the extent the Administrator deems necessary or appropriate to
assure the Plan's compliance with the provisions of the Family and Medical Leave Act
of 1993 and any regulations pertaining thereto.
13 f)00020
ARTICLE V
FLEX DOLLARS AND ADDITIONAL CASH BENEFITS
5.1 Flex Dollars. A Participant will be eligible to receive Flex Dollars if, and to the extent
that, the City has elected to provide Flex Dollars under the Plan consistent with any
applicable Memorandum of Agreement for Competitive Service employees, City
Council adopted Management Benefits Resolution, and /or City ordinance adopting
City Council compensation. Prior to the commencement of each Period of Coverage
the City shall determine the amount of Flex Dollars available to each such Participant
in accordance with the rules and procedures adopted by the City and by the Plan
Administrator, which shall not discriminate in favor of Highly Compensated Employees.
The Administrator shall notify such Participant in writing of the amount of Flex Dollars
available to him or her for the Period of Coverage (or for the balance of the Period of
Coverage).
5.2 Allocation of Flex Dollars. Any Flex Dollars available to a Participant under this Article
V shall be applied proportionately each pay period toward the cost of the Optional
Benefit Coverages elected by the Participant. If for any Period of Coverage the cost of
the Optional Benefit Coverages elected by the participant exceeds the Participant's
Flex Dollars, then the Participant's compensation shall be reduced proportionately
each pay period in the amount of the excess, and an amount equal to the
compensation reduction shall be contributed by the Employer to cover the remaining
cost of the optional Benefit Coverages elected by the Participant. However, if for any
Period of Coverage the cost of the Optional Benefit Coverages elected by the
Participant is less than the Participant's Flex Dollars, then the Participant shall receive
the value of any Flex Dollars not allocated to Optional Benefit Coverage and receive
the Flex Dollars as taxable income not to exceed the amount established by any
applicable Memorandum of Agreement for Competitive Service employees, City
Council adopted Management Benefits Resolution, and /or City ordinance adopting
City Council compensation.
5.3 Waiver of Coverage Cash Option. A Participant who has elected to waive coverage
under a medical Optional Benefit Coverage identified in Schedule A may elect the
Waiver of Coverage Cash Option for the benefit(s) waived. Under this Option the
Employer will increase such Participant's cash compensation as a taxable refund of
contributions, for each pay period during which the Participant does not have in effect
any medical Optional Benefit Coverage. Determination of the waiver amount available
to Participants, and the manner in which it is paid, shall be made in accordance with
the rules and procedure adopted by the Employer and by the Administrator, which
shall not discriminate in favor of Highly Compensated Employees. The Administrator
shall notify such Participant in writing of the waiver amount available to him or her for
the Period of Coverage (or for the balance of the Period of Coverage) under this
Option. An eligible Participant may elect the Waiver of Coverage Cash Option in
writing in such form and manner as the Administrator shall prescribe, at the same time
14 900921,
or times that the Participant is permitted to elect Optional Benefit Coverages under
Article IV. Such election shall be irrevocable during each Period of Coverage to the
same extent as an election of Optional Benefit Coverages identified in Schedule A.
ARTICLE VI
NON - DISCRIMINATION
6.1 Intent:
It is the intent of this Plan not to discriminate between any classes of employees or
create such an action in part or whole of this Plan document that is in violation of Code
Section 125 and Treasury regulations. The Administrator shall avoid all discretionary
acts, which could be deemed to be discriminatory under any applicable Code section
or law.
6.2 Reduction of Benefits and /or Contributions:
The Administrator may reduce, modify, change or reject the benefits or amounts of
contribution of any Participant of the Plan if the Administrator deems it necessary to
make certain this Plan does not discriminate in favor of Highly Compensated
Employees as defined in Code Sections 125 and any other applicable Code section or
law.
6.3 Treatment of Contribution Reductions:
Contributions in excess of benefits due to the Administrator's actions to avoid
violations of discrimination, shall be returned to the Participant in the form of a taxable
refund of contributions.
15 9001.)2'.
7.1
ARTICLE VII
ADMINISTRATION
Appointment of Administrator:
The Council shall designate the Administrator of the Plan. Such Designation of the
Administrator will be for the full term of the Plan, unless otherwise noted by the
Council. The name, address, and phone number of the Administrator of the Plan will
be:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Phone #: (805) 517 -6212
The Administrator shall be responsible for the complete management of the Plan, and
to undertake any action necessary to preserve the benefits of the Participants of the
Plan.
7.2 Duties of the Administrator:
The Administrator shall have all necessary power to carry out the full administration
and management of the Plan. The Administrator's powers shall include, but are not
limited to:
(A) To interpret the provisions of the Plan;
(B) To enforce all provisions of the Plan;
(C) To make changes in the Plan when necessary;
(D) To decide all questions of eligibility;
(E) To decide all questions of benefits;
(F) To decide the proper management of benefit claims;
(G) To obtain from every employee the necessary forms and documents that allow
participation in the Plan;
(H) To obtain from every Participant the necessary forms and documents that allow
either continued participation or termination in the Plan;
(1) To contract with any and all insurance companies or other suppliers to provide
benefits under the Plan;
(J) To notify each Participant in writing of any amendment of the Plan, of any
proposed amendment of the Plan, of the termination of any benefit of the Plan,
and of the termination of the Plan;
16
(K) To provide guidance for employees and Participants as to questions of
participation, benefits, or personal objectives in connection with the Plan;
(L) To appoint necessary agents, consultants and professionals to assist in
administering the Plan and completing necessary documentation and
reportings;
(M) To avoid discrimination under the Plan;
(N) To pay for any administrative costs of the Plan;
(0) To do any other acts as deemed necessary to administer and manage the plan
for the benefit of its Participants.
7.3 Reports and Records:
The Administrator shall keep complete books, reports and records of all activities
under the Plan. The records of the Plan shall be open for inspection during normal
business hours, to the City and to each Participant, of only that Participant's individual
participation records. The Administrator shall prepare and submit to the City an
annual report containing material, which the Administrator deems necessary under
Sections 125 and 129 or any other section of the Code.
7.4 Fiduciary Responsibilities:
The Administrator shall conduct its duties of the Plan as a fiduciary for the Participants
and their beneficiaries. The Administrator must exercise proper judgement and
diligence in carrying out any action and in any capacity as Plan Administrator. The
Administrator shall act according to the Plan and the administrative duties contained
herein, and such actions must be for the benefit of the Participants or potential
Participants of the Plan.
7.5 Indemnification of the Administrator:
The City agrees to indemnify the Administrator, and any employee of the City acting as
the Administrator, an assistant to the Administrator, or agent of the Administrator, to
the fullest extent permitted by law against any and all liabilities, claims, expenses, and
damages stemming from the actions or omissions of any such person in connection
with administering the Plan for the benefit of its Participants, as long as such actions
and omissions were at the time in good faith and carried forth with proper diligence
and care.
7.6 Administrator Limitations:
The Administrator is not responsible for the actual administration of group insurance
plans supplied by insurance carriers, as such plans shall be governed by the terms of
each such plan.
17 f)00924
8.1
8.2
ARTICLE VIII
AMENDMENT AND TERMINATION OF THE PLAN
Amendment:
The Administrator can amend the Plan by providing written notice to all Participants
and potential Participants of the change or pending change. Such amendment of the
Plan shall not affect the rights of a Participant pertaining to all clauses contained in this
Plan, or change any benefit of the Participant if such benefit has not been
subsequently changed by a carrier or the City, or change any right under the City's
group insurance plan.
Termination:
The City expects that this Plan will be maintained indefinitely, however, continuance is
not guaranteed. The City reserves the right to terminate the Plan at any time with
advance notice to Participants. Upon termination, no further contributions will be
made.
8.3 Rights of Participants:
If the Plan is terminated, the rights
reimbursements under the City's group
termination, are not affected in any manner
18
of Participants to receive benefits and
insurance plan for conditions prior to
90092S
ARTICLE IX
MISCELLANEOUS
9.1 Indemnification:
To the extent permitted by law, the City shall indemnify and hold harmless the
Administrator, the Plan Participants, its employees, or any other person who performs
duties of the Plan against all claims, losses, damages, expenses, and liabilities
resulting from their normal course of action unless it is determined that gross
negligence or willful misconduct occurred.
The Participants shall hold harmless the City, the Administrator, its employees or any
other person who performs duties of the Plan as directed by the City against all claims,
losses, damages, expenses, and liabilities arising out of any tax related matter, as the
City specifically makes no claim as to the tax treatment of the Plan, the qualification of
the Plan as a taxable or tax - exempt entity, tax deductions of contributions, or any other
assurance of future tax treatments as long as no gross negligence or willful
misconduct has occurred.
The City shall not be directly responsible for any action taken by any insurance carrier
who offers benefits to the City, nor shall it be responsible to make payments to any
Participant if the insurance carrier fails to do so.
9.2 Funding:
All contributions to the Plan do not have to be placed in trust accounts or specified for
certain benefits, nor is it required that the City or Administrator maintain separate
accounts for any or all Participants with regard to their contributions. The assets of the
Plan will be considered as general assets of the City to be used to timely pay for the
benefits selected.
9.3 No Effect on Other Employee Considerations:
Participation in this Plan by any employee of the City should not be construed as
anything but participation in one particular benefit offered by the City. Participation in
the Plan does not bind the City to any contractual obligation or employment obligation
with the employee, other than to the terms of the Plan documents.
19 ")00026
9.4 Titles and Headings:
The title and headings within this document are for simplification or reference only, and
are not intended to be complete in any definition or meaning of the actual plan. The
entire text of this document shall govern rather than any specific title or heading.
9.5 Gender and Number:
Wherever any words are used in the masculine, feminine or neuter gender, they shall
be interpreted to be applicable to all cases where they would apply. Wherever used in
this document, the singular shall mean the plural and the plural shall mean the singular
except where context requires otherwise.
9.6 Amendments in Writing:
Any and all amendments to this Plan, qualifications of the Plan, and interpretations of
the Plan, need to be in writing in order to be valid.
9.7 Separate Provisions:
If any provision of this Plan is deemed invalid or unenforceable, then only its validity or
enforceability shall be questioned or changed, and it will not affect in any manner any
other provision of the Plan or the Plan itself.
9.8 Plan Number:
The Plan Number shall be 501.
9.9 City Information:
The name, address, phone number, and employer identification number of the City is:
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Phone #: (805) 517 -6213
EIN: 95- 3860962
9.10 Service of Legal Process:
The name, address, and phone number of the agent for service of legal process is:
City Clerk
City of Moorpark
799 Moorpark Avenue
Moorpark, California 93021
Phone #: (805) 517 -6213
20 000 OZ, It
SCHEDULE A
OPTIONAL BENEFIT COVERAGES
Optional Benefit Coverages shall consist of the coverages(s) available to a Participant under
the following Plan (s) maintained by the City:
Health Insurance Plan through the California Public Employees' Retirement System
21 1)()0 8
SCHEDULE B
FLEX - DOLLAR ALLOWANCE SCHEDULE
Flex Dollar Allowance Effective January 1, 2005:
With Medical Coverage
Total Monthly Employee Benefit
All Competitive Service
$908.00*
Employees
.............. III— .......... ............ ...... .......................................... .... ..................... ........ .................. .................... ....................
Department Heads
........ .................. ....................................................... ..................... .... .................. .... ............................................. ......................... I...............
Maximum CALPERS (PERSCARE)
........................................................................................................................... ...............................
family .rate**
....
........................................................................................... ...............................
Non - Department Head
$908.00 **
Management..._ Employees .............. ...............................
.................................................................................
City Council Members
$908.00 * ** ...............................
* As determined by City Council approved
Service Employees.
** As determined by City Council approved
* ** As determined by City Council ordinance.
DOMESTIC PARTNERS
Memorandum of Agreement for Competitive
Management Benefits Resolution.
Eligible domestic partner shall mean in accordance with Chapter 588, same -sex partners and
opposite sex partners over the age of 62 eligible for Social Security and share a common
residence and who enroll with the City group health plan within the Cal -PERS established
guidelines. This will include providing the City with a Declaration of Domestic Partnership
from the Secretary of State and signed State of Financial Liability. Domestic Partners eligible
for City registration but not with the Secretary of State and who wish to receive a health
benefit allowance must complete an affidavit of City Domestic Partnership with the City of
Moorpark.
Domestic Partners may be accepted outside of the open enrollment period only if it is within
the thirty (30) day domestic partner registration period with the City.
22 () 009'41 t_�
EXECUTION PAGE
IN WITNESS WHEREOF, the City has caused this Plan to be signed by the City
Manager as of the day of ,
CITY OF MOORPARK
Steven Kueny, City Manager