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6. Resolution 4969 - Tax Benefit Plan for City EmployeesREPORT TO: City of Kalispell 3 aN 01"," 8--, >c. is ei? -:es �- s !. rs a £('3 a Honorable . av r and City Council Marti Rishoff Flexible Benefits Plan BACKGROUND-6 The Citv has participate in a fle-x program qualified ureer Section I2-5 of the I tel-nal Reve _- Code si to July 1- 2002 to wich-Iplod es may co trio t wags,'; that pro -vide tax sav1ngis on insurance prernlumsa medical expenses and dependant care. The adoplion of this resolution lj all f r at pa r the � pr ray a t t r riployees, This Company offers a nv�w benefit of paperless claims rei l;arsera?em at a cost savings, to the City, The City- Council approve the resolation adopting a new Flexible Ben --fits Plan for the Cft- of allspeff', ALTERNATIVES. As suggested by C uncile espectively surrattem a Marti is€;f Personnel Speclalist C;�Ja�nnes tl. at1l l� Cite Mana2er Report co pHe ece , er 15, 2004 RESOLUTION NO.4969 A RESOLUTION BY THE CITY OF KALISPELL AMENDING THE AGENT FOR THE CITY'S FLEXIBLE BENEFITS PLAN. WHEREAS, the City of Kalispell had previously adopted a cafeteria plan within the context of Section 125 of the Internal Revenue Code for the benefit of the employer's eligible employees; and WHEREAS, the City now wishes to contract with Employee Benefit Resources, LLP, to be the agent for the cafeteria plan. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, MONTANA, AS FOLLOWS: SECTION I. That the City hereby adopts Amendment No. One to the Flexible Benefits Plan (consisting of the flexible benefits plan document, the Adoption Agreement, and component benefit plans and Policies) for the City, effective as of the date specified in the Adoption Agreement. SECTION II. That any officer of the City may, without a further resolution, execute the Adoption Agreement and any related documents or amendments which may be necessary or appropriate to adopt the plan or maintain its compliance with applicable federal, state and local law. SECTION III. This Resolution shall become effective immediately following its passage by the City Council and approval by the Mayor. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS 20TH DAY OF DECEMBER, 2004. Pamela B. Kennedy Mayor Attest: Theresa White City Clerk AMENDMENT NUMBER ONE TO CITY OF KALISPELL FLEX113LE BENEFITS PLAN AMENDMENT TO CITY OF KALISPELL FLEXIBLE BENEFITS PLAN BY THIS AGREEMENT, City of Kalispell Flexible Benefits Plan (herein referred to as the "Plan") is hereby amended as follows, effective as of January 1, 2005. Article XII is added: ARTICLE XII ASSIGNMENT OF ADMINISTRATIVE FUNCTIONS 12.1 ASSIGNMENT OF ADMINISTRATIVE FUNCTIONS. Certain administrative functions related to the operation of the Plan are assigned to the Employer by the Plan. The Employer may enter into a service contract with an agent of the Employer ("Agent") to perform such administrative functions. 12.2 ADMINISTRATIVE FUNCTIONS. (a) The Plan and any health insurance issuer or business associate servicing Plan will disclose Plan Participants' individually identifiable health information, including Participants' Protected Health Information to Employer or an Agent of the Employer only to permit Employer or the Agent to carry out the following plan administration functions for Plan: (1) "Automated Claims Processing", including claims processing, adjudication, and reimbursement. "Claims" includes only that payment information that indicates an individual has incurred an out-of-pocket expense such as, but not limited to, a deductible or co -payment or other individually identifiable health information used for testing the automatic processing system. Plan Participants may elect in writing to participate in Automated Claims Processing. Under Automated Claims Processing, Claims for employees enrolled in the Employer's group health plan offered by BlueCross BlueShield of Montana ("BCBSMT") will automatically be submitted by BCBSMT to Employee Benefit Resources, LLP ("EBR"), the Employer's Agent. EBR will submit such Claims against the Participant's flexible spending account administered by EBR. (ii) Enrollment of Participants and new annual flexible spending account elections. (iii) Posting of payroll withholdings relating to the Participant's flexible spending accounts. Any disclosure to and use of Plan Participants' Protected Health Information by Employer or the Agent will be subject to and consistent with the provisions of the specifications and requirements of the implementing rules of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA') set forth in 45 CFR Parts 164, Subparts A and E. Plan shall not disclose Plan Participants' Protected Health .Information to the Employer or the Employer's Agent unless or until the Plan has received certification by the Employer that the Plan Documents have been amended to provide for the privacy of the Plan Participants' Protected Health Information and that the Employer agrees to the privacy protections provided by such Amendment. 12.3 RESTRICTIONS ON EMPLOYER AND AGENTS OF THE EMPLOYER — USE AND DISCLOSURE OF PROTECTED HEALTH INFORMATION. (a) The Employer and its Agents will neither use nor further disclose Plan Participants' individually identifiable health information, except as permitted or required by the Plan Document, as amended by this Article, or as required by law. (b) The Employer and its Agents will ensure that any agent, including any subcontractor, to which it provides Plan Participants' individually identifiable health information agrees to the restrictions, conditions, and security measures of the Plan Document, as amended by this Article, with respect to Plan Participants' individually identifiable health information. (c) Neither Employer nor its Agent will use Plan Participants' Protected Health Information in any employment -related actions or decisions or in connection with any other benefit or employee benefit plan of the Employer. (d) Employer will, and will cause its Agent to, report to the Plan any use or disclosure of Plan. Participants' Protected Health Information that is inconsistent with the uses or disclosures provided by this Amendment of which the Employer or Agent becomes aware. (e) Employer or its Agent will provide access to Protected Health Information maintained in a Designated Record Set to the Individual who is the subject of the Protected Health Information in accordance with 45 CFR 164.524. (f) Employer or its Agent will make Protected Health Information available for amendment and will incorporate any amendments to Protected Health Information in accordance with 45 CFR 164.526. (g) Employer or its Agent will make available such information as is necessary to satisfy the accounting requirements of 45 CFR 164.528. (h) Employer or its Agent will make internal practices, books, and records relating to Plan Participants' Protected Health Information available to the Secretary of the U.S. Health and Human Services for purposes of determining compliance with 45 CFR Part 164, Subparts A and E. (i) Employer or its Agent will return or destroy all Plan Participants' Protected Health Information if feasible when such Protected Health Information is no longer needed. If return or destruction of Plan Participants' Protected Health Information is not feasible, then Employer and its Agent will limit further uses and disclosures of such Protected Health Information to those purposes which render the return or destruction infeasible. 12.4 ADEQUATE SEPARATION BETWEEN EMPLOYER AND PLAN. (a) The following employees or classes of employees or other workforce members under the control of Employer or Employer's Agent may be given access to Plan Participants' Protected Health Information received from Plan or a health insurance issuer or business associate servicing Plan: llj %-1allilb r1V%,U031116 OLCU1 V1 il1G A ,e111. (ii) Consulting Staff of the Agent or its related entities (iii) Information Technology Staff of the Agent or its related entities (iv) Employees whose job duties include administrative functions of the Plan, including the performance of duties relating to payment, or other matters pertaining to the Plan performed in the ordinary course of business. (b) The employees, classes of employees or other workforce members identified in Paragraph 12.4(a)(i) through 12.4(a)(iii), above will have access to Plan Participants' individually identifiable health information, including Protected Health Information, only to perform the plan administration functions that Employer provides for Plan, as specified in Paragraph 12.2(a), above. (c) Any employees, classes of employees or other workforce members that violate the terms of this Amendment will be subject to discipline in accordance with the Employer's policies pertaining to discipline and sanctioning of members of the workforce. IN WITNESS WHEREOF, this Amendment has been executed thi� day of 20 Bar: -employer City of Kalispell Flexible Benefits Plan