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HomeMy WebLinkAbout7 COLA increases Agenda Item # 7 CONSENT To: Board of Directors From: Nancy Waters Date: November 19, 2008 Subject: Approval of Employee COLA increases, 125 Plan and Salary Range Adjustments 1. WHY THIS MATTER IS BEFORE THE BOARD There are three areas included in the FY09 budget that need approval from the Board: • COLA Increases • Implementation of a 125 Plan • Salary Range adjustments of three management positions 2. HISTORY The date of the last general COLA increase for all employees was January 1, 2008. Two non-union positions have been out of salary range and received no COLA increases for 24 months. The third position has been recommended for a salary range adjustment by the department head. 3. NEW INFORMATION COLA - Bargaining Unit The employees included in the bargaining unit, IBEW Local 1245, have a contractual labor rate adjustment of 4% for 2009. Per the MOU, the CPI-W average for August 2008 was used to determine this adjustment, with a minimum of 3% and maximum of 4%. The CPI-W for August was 5.9%. COLA- Management and Professional Staff A portion of the CPI-W increase (estimated at .8%) is based upon medical expenses. District employees are largely insulated from medical cost rises since the District pays the medical insurance premiums. Backing-out the .8%, the CPI-W average would be lowered to 5.1%. The management and professional staff are represented by the General Manager. Staff is proposing to increase the salary ranges for this group by 5%. This increase is slightly below the adjusted CPI. 125 Plan -All employees and Board members A 125 Plan is an IRS approved plan for District employees and Directors to set aside pre-tax dollars to be used to pay for non-covered medical, dental, and prescription costs, over-the- counter health items, as well as dependant-care expenses. Participants decide in-advance the amount (up to $5,000 for health care and another $5,000 for dependent care) that they would like deducted 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. This type of plan is a benefit the District can offer that is not related to salary and has no impact on retirement expense. Attached is a side letter with IBEW Local 1245 accepting the 125 Plan. The administrative cost to the District is $6 per month per participant. The maximum cost, depending on the number of participants, is estimated to be less than $5,000 annually, equating to an overall labor benefit of less than 0.001%. Salary Range Adjustments Salary range adjustments are proposed for three management positions. The first position, the Technical Programs Administrator is currently assigned to Range 30. Due to the job duties significantly changing, staff is recommending adjustment of this position to Range 33. This position has not had a COLA nor a Range adjustment in 24 months. The second position is the Conservation Administrator. The Conservation program has had a successful year and staff is recommending adjustment of this position to Range 31. This position has not had a COLA nor a Range adjustment in 24 months. The third position is the Human Resources Administrator. The Administrative Services Manager has recommended adjustment of this position from Range 30 to Range 32 to reflect the incumbent's completing a certification program and increased responsibilities. 4. FISCAL IMPACT The annual cost impact related to the COLA increases for Bargaining Unit and Management employees, implementation of the 125 Plan and salary range adjustment proposals for FY09 is $283,693, and has been included in the budget. 5. RECOMMENDATION Approve these items for January 1, 2009 implementation and authorize the Board President to sign the 125 Plan Agreement with Cooperative Benefits Administrators Inc. Mary Chap n Michael D. Holley Administrative Services Manager General Manager i r�42 � -� �� � � s U1. November 12, 2008 ° eral Mana-er Pat Waite Business Representative IBEW Local 1245 Dear Pat: As we discussed in the November 6, 2008 Labor/Management Steering Committee meeting, the District is proposing to introduce a new 125 supplemental insurance plan in 2009 that will include a Health Care Flexible Spending Account and Dependent Care Reimbursement Account. This plan will be considered a "pilot program" where either party can choose to opt-out (with 30 days notice) at the end of the tax year. Pending final approval from the Board of Directors on November 19th, this plan will be offered to all bargaining unit members who choose to participate. The District will pay the administrative fees charged by NRECA for each participant. Please let me know if you have any questions; if not, please sign below acknowledging your acceptance of the 125 Plan. Sincerely yours, ? .- -y- Michael D. Holley, P.E. General Manager Patrick Waite Business Representative IBEW Local 1245 ADMINISTRATIVE SERVICES AGREEMENT THIS AGREEMENT is made and entered into this 19 t h day of November , 200 8 , by and between Cooperative Benefit Administrators, Inc. ("CBA"), a Nebraska Corporation, and T r u c k e e D n n n P r (the "Employer"). Public Utility District WHEREAS, the Employer sponsors the 125 Plan (the "Plan"), which is a cafeteria plan under Section 125 of the Internal Revenue Code of 1986, as amended ("Code") that provides one or more of the following benefits: a premium-only plan (POP) which allows employees to pay for insurance premiums on a pre-tax basis, a health care flexible spending account (the "Health Care FSA") under Section 105 of the Code, and a dependent care assistance benefit (the "Dependent Care Benefit") under Section 129 of the Code; WHEREAS, the Employer desires to enter into an agreement with CBA, a wholly-owned subsidiary of the National Rural Electric Cooperative Association ("NRECA"), pursuant to which CBA will process claims and pay benefits on behalf of the Plan and furnish certain other administrative services with respect to the Plan; WHEREAS, the Employer and CBA intend to protect the privacy and provide for the security of Protected Health Information) ("PHI") (defined below) that will be disclosed to CBA by the Employer for Health Care FSA administration purposes, pursuant to this Agreement in compliance with the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and the regulations promulgated thereunder (the "HIPAA Regulations"); and WHEREAS, as part of the HIPAA Regulations, the Privacy Rule (defined below) and Security Rule (defined below) require the Employer to enter into a contract containing specific requirements with CBA prior to the use and disclosure of PHI or EPHI (defined below), as set forth in, but not limited to, 45 CFR Sections 160, 164.502(e) and 164.504(e) and contained in this Agreement. NOW, THEREFORE, for valuable consideration and in order to put into effect the desire of the parties hereto, it is mutually understood and agreed as follows: SECTION_1 - TERM, RELATIONSHIP OF PARTIES AND DEFINITIONS 1.1 Effective Date and Term. The effective date of this Agreement is , 200_ ("Effective Date"). The initial term shall be the calendar year or a portion thereof, commencing on the Effective Date. Thereafter, this Agreement will renew automatically for successive one (1) year periods "Participant" means an employee of the Employer who participates in the Plan. "Plan Administrator" means the Employer or committee appointed by the Employer to serve as the administrator of the Plan. "Plan Contributions" means employee pre-tax and after-tax contributions and, if elected by the Employer, includes Employer contributions. "Privacy Rule" means the HIPAA Regulation that is codified at 45 CFR Parts 160 and 164, and as amended from time to time. "Protected Health Information" or "PHI" means any information, whether oral or recorded in any form or medium: (i) that related to the past, present or future physical or mental condition of an individual; the provision of health care to an individual; or the past, present or future payment of the provision of health care to an individual; and (ii) that identifies the individual or with respect to which there is a reasonable basis to believe the information can be used to identify the individual, and has the meaning assigned to such term under HIPAA under the Privacy Rule, including, but not limited to, 45 CFR 160.103. "Security Rule" means the Security Standards for the Protection of Electronic Protected Health Information at 45 CFR Part 160 and Part 164, subpart C. SECTION 2 - SERVICES PERFORMED BY CBA 2.1 Engagement of CBA. The Employer hereby engages CBA to perform for and on behalf of the Plan, claims processing and payment services, and CBA agrees to perform such services, under and subject to, and in compliance with, the provisions of this Agreement. 2.2 Claims Processing. CBA, as agent for the Employer, agrees to process and pay claims for benefits for the Health Care FSA and Dependent Care Benefit in accordance with the terms of the Plan and this Agreement. CBA agrees to establish procedures for administering initial claims for benefits and withdrawing the Employer's funds to pay benefits under the Plan. 2.3 Prior Claims for Reimbursements and Prior Administration. The Employer agrees that CBA shall have no duty or obligation with respect to claims by Participants for reimbursements of charges incurred prior to the Effective Date ("Prior Reimbursement Claims") and any administrative services related to or arising from such Prior Reimbursement Claims ("Prior Administration"). The Employer further agrees to maintain written records of all Prior Reimbursement Claims and Prior Administration sufficient to comply 3 2.10 Administrative and Support Personnel. CBA shall provide sufficient and qualified administrative and support personnel during its normal business hours to enable CBA to perform all the services required by this Agreement. SECTION 3- - RESPONSIBILITIES OF EMPLOYER 3.1 Plan and Participant Information (a) The Employer shall furnish to CBA on a timely basis all information necessary for CBA to perform its services hereunder, including, but not limited to, Participant elections; Participant election changes due to mid- year changes in status; Participant changes of address; Clearing Account (defined below) information; changes in Participant employment status; COBRA elections; and Participant elections to use the claim interface program. Such information shall be provided to CBA in the time and manner as set forth in the sample Plan document and sample 125 Plan Administrative Guide. CBA shall not have any responsibility for benefits paid in error due to information provided by the Employer. CBA shall not have any obligation to credit the Plan for any claims expenses or administrative fees incurred or paid to CBA as a consequence of incorrect or inaccurate information provided by the Employer. CBA shall assume all such information is complete and accurate and is under no duty to question the completeness or accuracy of such information. (b) The Employer agrees to provide to CBA written notice of all material modifications to the Plan at least thirty (30) days prior to the effective date of such modifications. CBA shall determine within thirty (30) days of receipt of such notice whether it can continue to provide the services under this Agreement. If CBA cannot do so, CBA reserves the right to terminate this Agreement. If CBA can do so, CBA and the Employer reserve the right to amend this Agreement pursuant to Section 7.1 to the extent changes to the Agreement are necessary. 3.2 Sole Responsibility. Without limiting the Employer's responsibilities to those described herein, it shall be the Employer's sole responsibility and duty to: ensure compliance with COBRA; perform required nondiscrimination testing; amend the Plan as necessary to ensure ongoing compliance with applicable law; file any tax or governmental returns relating to the Plan; determine if and when a valid election change has occurred; execute and return required Plan and claims documentation; and take all other steps to maintain and operate the Plan in compliance with applicable provisions of the Plan, ERISA, HIPAA, the Code and other federal and state laws. 3.3 Clearing Account for Pavment of Claims. The Employer shall maintain an Automated Clearing House ("ACH") general ledger account ("Clearing Account") through a qualified financial institution, with sufficient funds for the 5 Employer may terminate this Agreement without penalty by giving written notice to CBA. SECTION 5 - COMPLIANCE WITH HIPAA PRIVACY RULE 5.1 Use/Disclosure of PHI. Except as-otherwise specified herein, CBA may make any and all uses and disclosures of PHI necessary to perform its obligations under this Agreement with respect to Health Care FSA administration, as required by law, or as otherwise permitted by this Agreement. With regard to its use and/or disclosure of PHI, CBA agrees to: (a) use and/or disclose PHI only as permitted or required by the Agreement or as required by law; (b) use appropriate safeguards to prevent the use or disclosure of PHI other than as permitted by the Agreement; (c) promptly report to the Employer any use or disclosure of PHI of which it becomes aware that is not permitted or required by the Agreement; (d) require all its subcontractors and agents that create, receive, use, disclose or have access to PHI to agree, in writing, to the same restrictions and conditions on the use and/or disclosure of PHI that apply to CBA under this Section 5; (e) make available its internal practices, books, and records relating to the use and disclosure of PHI to the Secretary of the U.S. Department of Health and Human Services for purposes of determining CBA's compliance with the HIPAA Regulations; (fl within thirty (30) days of receiving a written request from the Employer, make available information regarding disclosures by CBA necessary for the Employer to make an accounting of disclosures of PHI about an individual; (g) within fifteen (15) days of receiving a written request from the Employer, make available PHI necessary for the Employer to respond to individuals' requests for access to PHI about them in the event that the PHI in the possession of CBA constitutes a Designated Record Set; and (h) within thirty (30) days of receiving a written request from the Employer, incorporate any amendments or corrections to PHI in accordance with the HIPAA Regulations in the event that the PHI in the possession of CBA constitutes a Designated Record Set. 7 5.7. Obligation of the Employer. The Employer shall be responsible for using appropriate safeguards to maintain and ensure the confidentiality, privacy and security of PHI transmitted to CBA pursuant to this Agreement, in accordance with the standards and requirements of the Privacy Rule, until such PHI is received by CBA. 5.8. Termination by the Employer. In addition to any other termination provisions of this Agreement, if CBA fails to comply with the provisions of this Section 5 and such default or violation continues uncured for a period of thirty (30) days after written notice thereof has been given to CBA by the Employer, the Employer may terminate this Agreement without penalty by giving written notice to CBA. 5.9. Termination by CBA. In addition to any other termination provisions of this Agreement, if the Employer fails to comply with this Section 5 and such default or violation continues uncured for a period of thirty (30) days after written notice thereof has been given to the Employer by CBA, CBA may terminate this Agreement by giving written notice to the Employer. If the Employer has breached a material term of this Section 5 and cure is not possible, CBA, in its sole discretion, may terminate the Agreement without penalty. 5.10. Effect of Termination. Upon the termination or expiration of this Agreement, CBA agrees to return or destroy all PHI that it still maintains in any form if feasible to do so. If return or destruction of said PHI is not feasible, CBA agrees to extend any and all protections, limitations and restrictions contained in this Agreement to CBA's use and/or disclosure of any PHI retained after the termination of this Agreement, and to limit any further uses and/or disclosures to the purposes that make return or destruction of the PHI infeasible. This requirement shall survive any termination or expiration of this Agreement. 5.11. Construction. The terms of this Agreement shall be construed in light of any applicable interpretation or guidance on HIPAA and/or the HIPAA Regulations issued by Health and Human Services (HHS) or the Office of Civil Rights from time to time. 5.12. Capitalized Terms. Unless otherwise specified in this Agreement, all capitalized terms used in this Section 5 not otherwise defined have the meaning established for purposes of Title 45 CFR parts 160 through 164 of the United States Code of Federal Regulations, as amended from time to time. 9 (15) days from receipt of the notice of termination to cure or remedy the default. (c) Limited Continuation After Termination - If the Plan is terminated or if this Agreement is terminated while the Plan continues to be in effect, and if the Employer desires the limited continuation of CBA's claims processing services, then the Employer and CBA must mutually agree in writing that this Agreement shall continue for sixty (60) days for the purpose of payment of any Plan benefit, expense, or claims incurred prior to the date of Plan termination or Agreement termination, as applicable. If this Agreement is continued in accordance with this subsection (c), the Employer shall continue to pay the monthly fee set forth in Section 6.1 of this Agreement. SECTION 8 - MISCELLANEOUS 8.1 Severability. The invalidity or unenforceability of any terms or provisions of this Agreement shall in no way affect the validity or enforceability of any other terms or provisions, provided that the basic purposes of this Agreement are achieved through the remaining valid and enforceable provisions. 8.2 Compliance and Non-Waiver. Neither the Employer's failure nor CBA's failure to insist upon strict performance of any provision of this Agreement will modify such provision, render it unenforceable or waive any subsequent breach of the same or any other provision. No waiver or modification of any of the terms or provisions of this Agreement shall be valid unless in each instance the waiver or modification is accomplished pursuant to the amendment provisions of Section 7.1 of this Agreement. The failure to exercise any right under this Agreement shall not operate as a waiver of that right. 8.3 Assignment. This Agreement shall be binding upon, and inure to the benefit of, the parties to it, their respective successors and assigns, but may not be assigned by any party without the other party's written consent. Notwithstanding the foregoing, CBA may delegate performance of all or a portion of its duties to a CBA affiliate, provided that CBA remains the guarantor of and primarily liable for all obligations for services under this Agreement. 8.4 Circumstances Beyond Control of Parties. If any state laws, court cases or the regulations of any governmental agency, or other circumstances beyond the control of the parties prevents a party from meeting its obligations under this Agreement, the failure to meet these obligations shall not be considered a breach. Rather, the parties agree in this event to attempt to renegotiate the terms of this Agreement so that each party's obligations can be fulfilled and are in compliance with applicable law or regulations. 11 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and executed by their authorized officers. Truckee Donner PUD By: Date: Tim F. Taylor President of the Board COOPERATIVE BENEFIT ADMINISTRATORS, INC. By: Date: Pam Zimbelman Cooperative Benefit Administrators, Inc. 13