HomeMy WebLinkAbout7 Consideration of an Amendment to the 125 Plan (Employee Flexible Spending Plan) Agenda Item # 7
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Public
CONSENT
To: Board of Directors
From: Nancy Waters
Date: December 05, 2012
Subject: Consideration of an Amendment to the 125 Plan (Employee Flexible
Spending Plan)
1. WHY THIS MATTER IS BEFORE THE BOARD
The amendment to the 125 Plan, Employee Flexible Spending Account (FSA) requires
Board approval.
2. HISTORY
A 125 Plan is an IRS approved plan for District employees to set aside pre-tax dollars
to be used to pay for non-covered medical, dental, and prescription costs, as well as
dependant-care expenses. Participants decide in-advance the amount to withhold from
their pay. This amount is then available to draw upon for reimbursement of the above
items with pre-tax dollars. The 125 Plan is administered by Cooperative Benefits
Administrators Inc (CBA) and directly coordinates with deductibles and co-pays.
The District's 125 Plan with NRECA (CBA) was originally introduced in 2009. At that
time, the maximum employee annual contribution was $5,000 to the health plan and
$5,000 to dependent care.
3. NEW INFORMATION
The IRS has changed the contribution limits for eligible health care expenses
beginning January 1, 2013. The maximum contribution allowed will be $2,500, with no
changes to the dependent care contribution.
CBA is requiring an amendment to the 125 Plan Administrative Services Agreement
originally signed on November 18, 2008, to reflect the IRS changes. the Amendment is
included as Attachment 1.
4. FISCAL IMPACT
There is no additional cost to the District associated with this amendment.
5. RECOMMENDATION
Authorize the Board President to sign the amendment to the 125 Plan Agreement with
Cooperative Benefits Administrators Inc.
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Nancy Waters Michael D. Holley
Human Resource Manager General Manager