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HomeMy WebLinkAboutR-2001-057 Medical Savings Account / Voluntary Employees’ Benefit Association (MSA / VEBA) PlanRESOLUTION NO. R-2001- 57 A RESOLUTION authorizing the establishment of a Medical Savings Account/Voluntary Employees' Beneficiary Association ("MSA/VEBA") Plan for employees of the City of Yakima represented by Local 469, International Association of Firefighters, AFL-CIO. WHEREAS, the Internal Revenue Code, Section 501(c)(9) allows for the creation of a voluntary employee beneficiary association which is employee sponsored, tax- exempt health and welfare trust; and WHEREAS, such tax-exempt plans are available for public sector employees in the State of Washington; and WHEREAS, on October 21, 1992, there was established the "Voluntary Employees' Benefit Association for Public Service Employees in the State of Washington Trust" ("Trust'); and WHEREAS, on November 19,1999, the Trust was amended and restated; and WHEREAS, the City of Yakima ("City") has determined that establishing a medical expense reimbursement plan, which provides a tax-free account for employees to pay for medical, dental, vision, and tax -qualified long term care expenses that are not paid by any other insurance plans, is in the best interest of the City and the employees represented by Local 469, International Association of Firefighters, AFL-CIO ("Local 469"); and WHEREAS, the City desires to establish a medical expense reimbursement plan for said employees; and WHEREAS, the City desires to use the services of MSA/VEBA Trust to administer such plan; and WHEREAS, such medical expense reimbursement plan established by the City will be administered in accordance with the plan documents provided by the MSA/VEBA Trust on file with the City, now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: 1. Effective March 20, 2001, the City hereby elects to participate in the Trust as presently constituted or hereafter amended using the MSA/VESA Trust as its plan (1k)res/veba trust/ (ire/ local 469/.pm administrator, and establishes the MSA/VEBA program for all eligible employees represented by Local 469. 2. The Plan will be funded by cashouts of eligible employee sick leave accounts upon retirement. 3. The City Manager of the City of Yakima is hereby authorized to take all necessary and appropriate actions to effect this Resolution. ADOPTED BY THE CITY COUNCIL this 20th day of March, 2001. y Place, Mayor ATTEST: h� , ij 2 • ,,-(�-d o C ate - City Clerk ft)res/veba trust/fire/loca1469/.pm IN THE NORTHWEST What is the MSA VEBA The MSA VEBA Plan is a pre -retirement and post-retirement medical expense ��„ reimbursement account. The NISA VEBA Plan enables your employer to make $ tax-free contributions into an MSA VEBA Trust account on your behalf. The ties, cities, towns and special purpose Plan is available to employees of coun districts in Idaho, Oregon and Washington. A I A VEBA is a tax-exempt trust authorized by Internal Revenue Code Section -What is a tax501(c)(9). The tax objectives of this type of plan are to enable your employer to what are objectives the1ail�,r make tax-free deposits on yourbehalf to the Plan, for your account to be credited with tax-free investment earnings, and to enable you to obtain tax-free ents. reimbursements for your medical expenses and insurance premium paym MSA VEBA contributions are not W-2 reportable. i " o � participate p\,n MSA VEBA account provides a tax-free source of funds to pay for the cost SBA3a?" of health care expenses for you; your spouse, and your qualified dependents. in the MSS Your MSA VEBA account maybe used to pay any qualified pre- or post-retirement medical, dental, or vision out-of-pocket expenses (deductibles, co -payments, I co-insurance, etc.), plus post-retirement medical, dental, or vision insurance premiums, Medicare supplement plans, and long premiums, Medicare Part B term care insurance premiums. „ f at funding sources I ,There are many potential funding sources of MSA VEBA deposits, such as - are available for I 1. Sick leave or other leave cash outs. SA VEBA deposits?" 2, Employer benefit contributions on a periodic basis 3. Contributions in lieu of salary increases, (or salary reductions) for a group of employees. 4. Pension contribution rate reduction savings (such as PERS savings). 5. Other miscellaneous sources. "How do I become a When hen you are eligible, you become a participant by completing the attached participant in the plana" Membership Enrollment Form and delivering it to your benefits' office. Your MSA VEBA account will then be opened when your employer sends funds to the MSA VEBA Plan Administrator. "How do I get money out You may submit an MSA VEBA Medical Claim Form for your qualified out - of my MSA VEBA of pocket medical, dental, or vision expenses incurred by yourself, your spouse, account?„ and/or your qualified dependents. You may file claims for any amount. Benefits will be paid until your account is used up. You may also arrange to have monthly insurance premiums paid by using the NISA VEBA Systematic Payment Form. If your spouse or dependents are covered by different medical plans, their insurance premiums can also be paid for out of this account. Claims payment is efficient and hassle free. Fvr more infonnation call the VEBA Service Group, LLC. or. Western e stern asIl ngton 1-300-422-4023 30 -((509)5 �t-0600 em rNnshington 1-800-888-VEBA To order brochures (PSE03 Rev 4100) �.�a.n ffie cost of any retiree medical plan pais from lsn A V ENA account - "What rn� 1.s�taa happens if I don't withdraw money from MY . account dais year, or if I goat my job or take a leave of absence?"" MSA VEBA forms may be obtained from your benefits' department or: by calling: 1-800- JEBA101 or (509) 534-0600 by e-mail: admin@veba.org by writing: MSA VERA Plan Administrator c/o REHN & Associates 130 Box 5433, Spokane, WA 99205-0433 NOTE: Reimbursable health related benefits must beJ for expenses i�c�S VERA d after your MSA VERA account is first opened. Withdrazuals front youf account may be made only for qualified medical, dental, or vision expenses/ .i e xpenses are outlined in IRS Publication 502. Qualified dependents premiums. (�UcZitf e are outlined in .IRS Publication 501. you may obtain IRS publications by calling, 1- 800-TAXFORNI or on the Internet at "http:/lwwzU•ers.zistreas.�ov." Yes. The cost of any qualified medical plan you elect to use after retire- ment can be paid for out of this account• hdraw this Your l ble0u0ntil ultimat Funds ly pad out to you you don't it nd/or yourear will continue to be avai dependents or heirs, for qualified expenses. I]used on current cost estimates an average retired couple spends ins "mow much Medical ical e perase e T $4n money ���� � -need during dpproxunat..l� �. _..0 per month for their medical plan and relate costs, p .7. the on -coin costs for dental and vision care. As you bet older, you may also retirement?" on-going term face potential efor their post-retiremen t medi aI care. Many retirees will need over $50,000 ical „at happens lie before If you are survived by a spouse or dependent children (or other dependents as defined by the IRS), they will continue no eligible depend m account ;s used U.�?r� dent s}, y benefits until your account is used up. Ifya u - the funds remaining In your account will be paid as medical benefits to the Iheir(s) of your estate. „�A„_ . NIQ e VVE A Plan. I REHN & Associates in Spol<ane, WA is th Mee bSA ene its administrator Y�A Plan ia�D is aaLc lvxva� Administrator. REHN is an experience A r Administrator?”' specializing in the administration of ERISA health and welfare plans. All correspondence, accounting, and benefit payment services are provided by REHN & Associates. t health and welfare ust "Who ho is responsible for fh or ed by Trust is a non -pt os nmanag d btax-exemy Trustees who are elect d by a„�h�rized by IRC 501{c)(9). managing this Plan”' the Plan participants. ,.What are the Trustees The Trustees are fiduciaries and have a duty to act prudently and in the responsibilities?" best interest of you and all other Plan participants and beneficiaries. ,Will I receive a statement You will receive a semi-annual statement in January and July detailing of my account"" activity in your account. You may also call and request additional statements at any time. If you have questions about your MSA VEBA account, or about a pending claim, or need claim forms, contact the MSA VEBA Plan Administrator. "'Will my account grow?", The net investment earrings (after expenses are deducted) are credited tax -gree to your account on a monthly basis. "How is the MSA VEBAfhe Trust offers you three fund options. You may choose to allocate your money 1n�TeSt�'�rr VISA VEBA account in any of the following funds: ® Stable Value Fund (Conservative) Balanced Fund (Moderate) ® Growth Fund (Aggressive) Investments in the Balanced and Growth Funds will fluctuate in value. Please carefully study the Investment Fund Information and Investment's Summary on the back of this brochure or contact the MSA VEBA Plan Administrator and ask for the Investment Fact Sheets "How ,are expenses paid?" All expenses of administering the Plan are paid by reductions of investment earnings or, if there are no earnings, charged as a deduction to a participant's account. "'How do I find out moTe ( Contact the VEBA Service Group, LLC's regional office nearest you at the about this Plan?"' phone number listed below. Plan Consultants - VEBA Service Group, LLC: Eastern Washington Regional Office S. 400 Jefferson, Suite 301 Spokane, WA 99204-3143 1-800-888-VEBA (509) 838-5571 Fax (509) 838-5613 Mark R. Wilkerson, CFP - mark@veba.org Richard Dickman - rich@veba.org Western Washington Regional Office 11627 62nd Ave. E. Puyallup, WA 98373-4339 1-800-422-4023 (253)435-8835 Fax(253)435-8850 Peter J. Laney, CFP - peter@veba.org John Fulbright - john@veba.org MSA VEBA flan Administrator: REHN & Associates P.O. Box 5433 Spokane, WA 99205-0433 1-800-VEBA101 (509)534-0600 Fax(509)535-7883 Tim Yeager - admin@veba.org Legal Counsel: Liebman-Mimbu, PLLC 3223 3rd Ave. So., Ste. 200 Seattle, WA 98132 (206) 381-3375 Henry Liebman - legal@veba.org . . A n �: orl Investment Risk rA Will fluctuate in value on a Accounts invested in the Balanced and Growth Funds are not guurc�rLteew <u w • --- monthly basis. Benefit withdrawals from these funds may be worth more or less than your original deposit. v i„� Fund does not fluctuate in value and is invested in interest bearing, guaranteed investment LILe ILL..,.- . --- - -- contracts. Prior to submitting your Membership Enrollment Form, please carefully review your selected investment our fund choices}. Should your objectives change, you should Remember, anyvinvestmen t which contains (stoc' market s) and notify e Plan Administrator n writing of any changes. past in these ;T,-va"tments entails the risk of loss, and there have been numerous est periods dete s, particularly over of 4 vivo rnii4i slims that _... __- funds and there will be others izt ll�e =ut`w c• shorter time horizons, are 1lighly dependent on trends in various investment markets. Taus, ie Balancca and Growth Funds are suitable primarily as longer term investments and should not be used fors ort term investing Using multiple aT713 Us You may have your MSA VEBA account allocated to a single fund, twofunds, or to all three funds. Transfers ® You may transfer among the three funds layi�bfer re g ests mtstbe receivedund Transfer Lintion Form, wr ting bytthe MSAare VEBA effective the 1st business day of each mon g Plan Administrator by the 25th of each month in order to be effective on the 1st business day of the following month. Withdrawals If you have multiple hinds, withdrawals made from your account will be withdrawn prorata based on your fund allocation percentage on file with the MSA VEBA Plan Administrator. CONTRIBUTIONS y interest until the 1st Contributions are held in a short term investment fund �(STIFe t e participants' nd lted with urorent allocation instructions. of the month following receipt when they will L_ allocated r 11 j j� V C51.1'rie l i`a • Par uciyants are seen"raged to seek advice regarding these investmAdvice ent funds from their personal financial stees do not give investment advice. advisor. The MSA VEBA Tru EXPENSES Trust administrative expenses have averaged c e as Trust a is grow.sAdministrati.ved as all e expensepercent s vary rage net assets. These expenses are expected to d auditiz , slightly month to month and include legal fees, consulting fees, local servicing, printing, postage, g claims payment, etc. Investment advisory expenses for services provided by The Vanguard Group are .1$% for the Balanced Nona and .06% for the Growth Fund. d in the return of each fund the participant has selected. The effect of the expenses is reflecte QUALIFIED uses Foga YOUR VEBA ACCOUNT must request the VEBA Plan Administrator to reimburse you for qualified expenses/premiums. Qualified expenses/premiums are outlined in IRC .ion 213 and IRS Publication 502. (You can order IRS Publication 502 by calling 1 -800 -TAX -FORM or download from the IRS Website at http://www.irs.gov) "Medical care" expenses include amounts paid for the diagnosis, treatment, or prevention of disease, and for treatments affecting any part of or function of the body. The expenses must be to alleviate or prevent a physical defect or illness Expenses for solely cosmetic reasons generally are not expenses for medical care. Examples include face lifts, hair transplants, and hair removal (electrolysis). Also, expenses that are merely beneficial your general health (for example, vacations) are not expenses for medical care. ne fact or circumstance that often — but not always — indicates that medical care involves the treatment or prevention of disease is whether the care prescribed by a physician. A mere suggestion by a physician probably is not enough. In addition, there should be a doctor -patient relationship atween you and the physician prescribing the care. following is a list of the more common allowable claims (This is not a complete list.) COMMON QUALIFIED CLAIMS Medical Insurance Dental Insurance Vision Insurance Health Maintenance Organizations (HMO) Long Term Care Insurance (Tax Qualified) Medicare Part B Medicare Supplement Insurance Plan Deductibles Insurance Plan Co-insurance Office Visit Copays Physician Services Copays Prescription Copays adoption (medical expenses incurred before adoption is finalized) air conditioning and air filters used for alleviating illness kicoholism and Drug Treatment Center costs ambulance hire krtificial limbs and teeth 4utomobile modifications (hand controls, special equipment, mechanical lifts) Birth control pills Braille books & magazines Childbirth classes (birth preparation classes, not child rearing classes) ;t Lenses es - purchased or rented treatments gs - for a specific medical condition hose, medically prescribed sses or Prescription Sunglasses Fertility treatments Fluoridation devise Food & beverages, for specific diseases Genetic testing (to determine possible defects) Halfway house residency Hearing devices & batteries infertility treatment disability (special school or specially trained educator for learning disabled children recommended by doctor) Lifetime care at medical facility Medical Supplies Norplant insertion or removal Obstetrical expense Occlusal Guards - to prevent grinding of teeth Organ Transplants Oxygen equipment, rental of medical or healing equipment Physical Therapy Private Hospital Room Radial Keratotomy Retirement home fees, costs allocable to medical care Sanitarium or rest home Seeing -eye dog Services & Fees: Acupuncture Anesthetist Chiropractor Christian Science Dentist Diathermy Exam, physical Eye Exam Gynecologist Healing services Hospital Laboratory Lip Reading Services for the Deaf Medical info plan Nursing Oral Surgery Osteopath Physician Practitioners Psychiatrist Psychoanalyst Psychologist Physiotherapist Sex therapist Specialists Surgeons Special television set to receive closed captions Speech training for a child with dyslexia or other disability health fee for corrective devices (Including special mattress and board for arthritis) Telephone for deaf Therapy treatments Transportation expense relative to illness For specific questions about your claims, please call the VEBA Plan Administrator at 1-800-VEBA-101 or e-mail at: rehn@ior.com. Qxa.4fied Uses Revised 11198 VEBAPARI � AS OF MAY 99 2000 Counties/Cities/Towns Benton County City ofAurway Heights City of Arlington City of Cashmere City of Grandview City of'Palouse City of Post Fails City of SeaTac City of Selah City of Sunnyside City Ot—nr.:nsnv Franklin County Kittitas County Kootenai County Town of Odessa Special Purpose Districts Aunaoolis Water District Benton County PUD (*Pending) Cascade Valley Hospital Cedar River Water & Sewer Districts Chelan County PUD Covington Water District Douglas County PUD Ferry County PUD Franklin County PUD (*Pending) Grant County PUD King County Water District No 108 King County Water District No. I I1 King County Water District No. 20 King County Water District No. 49 Kung County Water District, No. 45 Special Purpose Districts (continued) King County Water District No. 83 K tsap C ;W t C_ur r i�iS1711 tNO. 5 Klickrtat County PUD (*Pending) Lake Roosevelt Development Assoc. Lakeliaven Utility District Mason County PUD 43 Midway Sewer District Mukilteo Water District North Perry Ave. Wa.0. DiStrtet Okanogan County PUD Olvnmic View Water & Sewer District Pend Oreille County PUD (*Peaduig) Pierce County Fire District No. 8 Port of Bremerton Port of Centralia Port of Ephrata Pot of Longview Port of Port Angeles Port of Skamama County Port of Vancouver Silver Lake Water District Skamania County PUD Snohoimsh County Fire District No 26 Snohomish County Fire District No. 5 Southwest Sub urhwa*i Scwer District Spokane County N02000S Weed Board Spokane firefighters Thurston County Fire District No I I Thurston County Fire No. 14 Valley Water Disinct Valvue Sewer District Water Distnet No. 111 . ,.t wiutworth Water Li�u,...._No �• 2 (*Pending means the employer iters adopted the Plan but hos not yet rrtade u contribution to the Trust.) Employees of cities, counties, towns, and special purpose tax districts are eligible to participate. L you have -My yu' i4nnc, or `•uo'- would Ince to discuss adding an MSA VEBA plan to your benefits package, please give us a call. VEBA SERVICE GROUP REGIONAL OFFICES: Western Washington: John Fulbright Peter Laney, CFP Phone: (253)435-8835 or 1-800-422-4023 Fax: (253)435-8850 E-mail: pjlaney@msn.corn 11627 62nd Ave. E .Puyallup, WA 98373 Eastern Washington: Richard Dickman Mark Wilkerson, CFP cnorSz�R_557i or 1-800-888-VEBA rnone. �,�,�— _ -. _ Fax: (509)838-5613 E-mail: wiik=n(�ior.com 400 S. Jefferson, Suite 301 Spokane, WA 99204 R..ed 05/09/00 _uBA MS7ArA�Vfr_l ME,1VIBIERSFU j . 1 0L L_,1VVi1JL 1 y ;L FO C1L Participant Information (Please print clearly.) Applicant's Name Address City Date of Birth phone No. VA��aL Fund Selection MSA VEBA Plan Administrator c/o REHN & Associates P O Box 5433 Spokane, WA 99205-0433 1-800-VEBA101 9 (509) 534-0600 Fax (509) 535-7883 Email: admiul@veba.org Social Security Number State Spouse's Name Please choose the investment fund or fund (s) for your MSA VEBA account. Stable Value Fund (Conservative) Balanced Fund (Moderate) Growth Fund (Aggressive) % Total must equal 100 % Please use whole numbers, we cannot account for fractions. Hold. Harmless Agreement & Required. Signa Do. Code If you do not choose an investment fund, the total value of your MSA VEBA account will be allocated to the Stable Value Fund. Benefit withdrawals from your funds will be made proportionately. I hereby become a Member of the MSA VEBA Plan & Trust for Public Employees ali e rtest., or to my I acknowledge that this Plan will provide benefits payable to me, my spouse, my qdependents heirs, and that benefits will be paid until -the account is used up. I hereby acknowledge that my employer is providing no tax advice regarding participation in this Plan. There- fore, I hereby agree to waive any claims against my Employer relating to participation in this Plan or to taxation of Plan benefits, and to indemnify and hold the Employer harmless for any taxes, assessments, damages or other costs that may be incurred. Signed this day Signature of Employee To the Employee: Please make a copy of this form for your personal records. Your employer will also keep a copy for their records. Your employer will send this form to the MSA VEBA Plan Administrator, along with their check for your MSA VEBA contribution. Upon receipt of the funds, the MSA VEBA Plan Administrator, REHN & Associates, will send you a welcome letter confirming the deposit, plus an initial MSA VEBA Claim Form, an MSA VEBA Systematic Payment Form and a Summary Plan Description. Please use your social security number whenever communicating with the MSA VEBA Plan Administrator. To the Employer Personnel/Benefits` Department: Please mail this form to the MSA VEBA Plan Administrator along with the contribution made payable to the MSA VEBA Trust. Employer Contact Person: Phone: E-mail: To order brochures or forms: e-mail admin@veba.org or call 1-800-VEBA101 or (509) 534-0600 (Spokane). (PSE03 Rev 4(00 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. I For Meeting Of 3/20/01 ITEM TITLE: Consideration of a Resolution authorizing the Establishment of a Medical Savings Account/ Voluntary Employee's Beneficiary Association ("MSA VEBA") Plan SUBMITTED BY: Dick Zais, City Manager; Al Gillespie, Fire Chief; Richard Andring, Deputy Fire Chief; Sheryl M. Smith, Deputy Human Resources Manager CONTACT PERSON/TELEPHONE: Sheryl Smith, x6665 SUMMARY EXPLANATION: The attached resolution authorizes the establishment of a Medical Savings Account/Voluntary Employee's Beneficiary Association ("MSA VEBA") Plan as allowed by IRS regulations. This matter was the subject of collective bargaining with the Fire LEOFF, Fire PERS and Public Safety Communications bargaining units. The parties agreed to implement a VEBA plan for sick leave cashouts only at the time of retirement. Individual employee sick leave cashouts will be deposited in the VEBA Trust account for the specific use for unreimbursed medical expenses such as insurance premiums, prescription drug co - pays, deductibles, and other unreimbursed medical expenses. Resolution X Ordinance Other (Specify) Contract Mail to (name and address): Funding Source APPROVED FOR SUBMITTAL - Qty Manager STAFF RECOMMENDATION: Pass resolution. BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2001-57