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Home My WebLink About2015-12-02 PACKET 04.D. REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # � � DATE 12/2/15 . . PREPARED BY: Administration Joe Fischbach ORIGINATING DEPARTMENT STAFF AUTHOR * * * * * * * * * * * * * * * * * * � * � � * * * * * * * * * * * * * * * * * * * * * * * * * * COUNCIL ACTION REQUEST: Consider adopting a resolution updating the Personnel Policy with changes to the Health Care Savings Plan (HCSP) and Annual Leave Accrual. STAFF RECOMMENDATION: Adopt the resolution. BUDGET IMPLICATION: $ $ BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE ADVISORY COMMISSION ACTION: DATE REVIEWED APPROVED DENIED ❑ PLANNING ❑ ❑ ❑ ❑ PUBLIC SAFETY ❑ ❑ ❑ ❑ PUBLIC WORKS ❑ ❑ ❑ ❑ PARKS AND RECREATION ❑ ❑ ❑ ❑ HUMAN SERVICES/RIGHTS ❑ ❑ ❑ ❑ ECONOMIC DEV. AUTHORITY ❑ ❑ ❑ ❑ ❑ ❑ ❑ SUPPORTING DOCUMENTS: � MEMO/LETTER: memo from Joe Fischbach dated 11/25/15 � RESOLUTION: 2015-xxx ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: � OTHER: brochure ADMINISTRATORS COMMENTS: , ��,� ��..f-� �-' Ci y Adminis rator Date * * * * * * * * * * * * * * * * * * * * * * * * * * * * * � * * � * * * * * * * * * * * * � * * COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER CITY OF COTTAGE GROVE �MINNESOTA To: Honorable Mayor and City Council From: Joe Fischbach, Human Resources Manage � Date: 11/25/15 Subject: Personnel Policy Amendment Background The City has had a Health Care Savings Plan (HCSP) for employees in the Non-represented Pay Plan since 2006. I have attached a brochure for your review. We have not made any changes to the funding levels since that implementation. There has been discussion from employees that they want to change the amounts that they are putting in to the HCSP. Because of the tax free status of the plan, the HCSP administrators are strict on how the design can be laid out. There can be no perceived individual choice in the funding choice. We surveyed the employees in the Non-represented Pay Plan group and a majority indicated that they want 1% of their annual wages and 0% of their Annual Leave put in to the plan upon separation of employment. There were some employees that have several years of service to the City that wanted some of their Annual Leave to go in to the HCSP upon separation of employment. Thus, that plan design is what we are bringing to Council for consideration. No employee is adversely impacted from what they are currently putting in to the HCSP. Lauren Nacar has requested that she be in the Annual Leave accrual group that 97% of all other employees are in. This is what we can refer to as the traditional accrual. When the AFSCME Clerical group negotiated their 2007-2009 contract they negotiated an Annual Leave accrual formula that was different than all the other employee groups. Including Lauren, there are six employees, out of about 130, that are on that accrual formula. Anyone hired in to positions of that group since 2008 are placed in the traditional accrual. Staff is recommending that Council approve Lauren's request. It will get us closer to having all employees with the same accrual rates. Recommendation Approve the resolution amending the Personnel Policy with the changes to the HCSP and Annual Leave accrual. RESOLUTION NO. 15-xxx A RESOLUTION AMENDING THE PERSONNEL POLICY; WHEREAS, in compliance with Minnesota State Retirement System rules regarding participation in their post-employment Health Care Savings Plan, the City Council must approve participation language in the Personnel Policy, now THEREFORE BE IT RESOLVED, by the City Council of the City of Cottage Grove, County of Washington, State of Minnesota, to amend the Personnel Policy as follows; SECTION 14. BENEFITS 14.5 MSRS Post-Employment Health Care Savinqs Plan (HCSP� For employees in pay grades I-III of the Non-represented Pay Plan and the City Administrator, they will contribute 2% of their annual salary as determined on the 1St of January of each year, contributed equally over 26 pay periods. For employees in pay grades IVA-XII of the Non-represented Pay Plan, they will contribute 1% of their annual salary as determined on the 1St of January of each year, contributed equally over 26 pay periods. Employees in all grades hired before 1/1/1992 will also convert 50% of their Annual Leave balance into their post-employment Health Care Savings Account upon termination or retirement from employment. Employees in all grades hired after 1/1/1992 will also convert 0% of their Annual Leave balance into their post-employment Health Care Savings Account upon termination or retirement from employment. WHEREAS, an employee has requested a change to the Annual Leave accrual and it would be practical to grant such a change, the Personnel Policy shall also be amended as follows; 14.3 Annual Leave. Each regular, full-time City employee included in the following job classifications; Payroll Specialist, ��^��i and Secretary hired before January 1, 2008 in the Non-represented Pay Plan shall earn annual leave at a bi-weekly rate, which will total the following amount of annual leave: Employees with 0 through 5 years City employment 144 hours per year Employees with 6 through 10 years City employment 152 hours per year Employees with 11 through 15 years City employment 200 hours per year Employees with 15+ years City employment 216 hours per year All other regular, full-time City employees included in the Non-represented Pay Plan shall earn annual leave at a bi-weekly rate, which will total the following amount of annual leave: Employees with 0 through 7 years City employment 144 hours per year Employees with 8 through 15 years City employment 192 hours per year Employees with 15+ years City employment 208 hours per year Passed this 2nd day of December 2015. The changes will be effective the 1St day of January 2016. Myron Bailey, Mayor Attest: Joe Fischbach, City Clerk w, ti, � s � "�o� � �� — 6 r, � � ��,,, �'� � � � �� '�g� 'I��: � � � ��r��y�dY} �'li' ��. �--��... � � > � r� �F �� . . �. �� ;4 � i�- � �� .� r-�. y. �� ^� �i � ^,, .,� s. � �rc P ��'t� �� .�� ' �a.€ � _ * > <, :. � . ��{rs._. .x � . � ., g .:3� , �. " r d i `£� . �. ' "' -e � -c�q \ /� �.`� �i w ._ f�. f d+i� �� } �i, _ _.. . ...:, _ � Gn _ � 1 � , � / • � / �� He�lth Care Savings Plan �ur'�`�ar-�,ree�alution � e • e � e �e � e a � m � ° • • e A • ° e A 8 ' A 1 ' @ 1@ 0 I 1 0 ' 11 0 1 B / e a • a 9 ' 1 e e A 0 " d 1 1 + ' 1 0 ' 1 9 1 � 1 ' i • � . e - e i a o a e e • i � o � e a o e �� o o e e s99 � � � � �• � � � � � � � � �- � � � - � ��Lt 1S tile 11�� ', 1 1 1 � • � � � � e � � - .�� The Health Care Savings Plan(HCSP)is an employer-sponsored program that allows you to invest money in a taa�-free account while you ace employed by a �� "' '� ' � Minnesota public emploj�er. Once you leave employment,you may access this money , , , ., for reimbursement of eligible medical expenses incurred by you,your spouse,legal tax dependents,and adult children up to their 26th birdiday.As you know,out-of-pocket � � � � medical expenses can quickly add up to thousands of dollars.Using the taY-fi•ee � � � �� dollars accumulated in your HCSP account to reimburse these costs may help provide ,, , ,. , . , , , significant savings for you and your fainily. � . ., .; . � � 111 HCSP is u tu�fi�ee�tccount, which yrae�ns contribzstions I '- 0 I 0 �tnd eligible reimbursements are not report�tble on feder�tl �� • � , , , � , oy�state income ta:x retu��ns. � � �� . , , , � 1�dministrative fees The annual administrative fee is 0.65 percent of your account balance.This fee is prorated and deducted monthly from your account balance.For example,if you have an account value of$10,000,MSRS will deduct$5.42 per inonth froin your account. 'Ihe m�itnutn annual fee is$140 or$11.67 per month.Fees are subject to change. I�ow are contributions made to the �ICSP? Contributions to your HCSP account are determined as follows: ■ If you are covered by a bargaining unit,contributions to the Plan must be negotiated or agreed to by both the bargaining unit and employer and written into a collective bargaining agreement or Memorandum of Understanding(MOU). ■ If you are not covered by a bugaining unit,contributions to the Plan must � be a reed to b our em lo er and included in a written ersonnel olic . �� g Y Y P Y P P Y �� ;�.� -i � �._ �: Only negotiated and agreed-upon contributions are allowed.You cannot choose to � �� contriUute to your HCSP account on an individual basis. �`' . � ,.�� r: -, =�. =; �� Is p�ticipation i� HCSP rnandato�? Can I opt out? It's EASY to manage All employees must participate in the HCSP adopted by their employer or bargaining unit.Ho�vevei;you can opt out of the Plan if you; 3'Oiir 1CCOUrit ■ are eligible for TRICARE retiree medical benefits, Yoa have the following options to monitor your HCSP account or ■ have a service-connected disabiliry. manage your investment selections: ■ I are a foreign national who plans to return to your country of origin. ■ Review quarterly statements ■ have comprehensive health insurance coverage provided for life that is ■ Log in to your account online at least 70 percent paid for by an emplo}�er(the insurance coverage must be provided by a source other rhan your current employer who sponsois at www msrs.state.mn.us 'your HCSP). ■ Contact an MSRS representative Once you opt out,you may not pardcipate at an}�time in die future.Please contact at 1-800-657-5757,option 3 MSRS for more information. ■ Call the Automated Voice Response(AVR)system at �Iow�ne eo�t�ibu�ians invested? i-soo-657-5757,opcion 2 Contributions to your HCSP are automatically invested in the Money Market Fund unless you elect one or more'of the other investment options of�ered.Yoa have the freedom to change your investment miY at any time or transfer your existing ', account balance among any of the investment options offered by the Plan.* *Yot�n��ty stot trarufer Gal�nces direct/y fi•m�t tl�e StnGle Vrtltte Fintr!ta tbe ManeylYl�rket Finul. I�CSI' it�vestynent options You can invest your HCSP contributions in any combination of seven investment options offered by the Plan. Please consider the investment objectives,risks,charges,and expenses of the investment options cazefully before investing.For this and other important informadon about investments offered through your Plan,you may obtain a Minnesota Supplementallnvestnzent Fisnd Prospectzrs at ww�v sbi.state.mn.us under the Publications link.Read them carefully before invesdng. Risk/Reward Potential Investment Name Annual Investment Expenses* HIGHER Broac�International Stock Fund ' ' 0.30% U,S. Stock Actively Managed Fund 0.22% U.S. Stock Index Fund '0.02% Balanced Fund 0.01% Bond Fund ' 0.11% Stable Value Fund 0.28% LOWER :Money Market Fund ; 0.01% � An investment in�Money Market Fitnd is not insured or gla�tr�nteed by the Federal Deposit Insaarance Co�po��tion or�tny ' other gnvet7rment�cgency.Althot�gh the�'�tncl seeks to preserve the v�tlare ofyour ifsvestr�sent at$1.00 per share, it is possible to lase money by investing i�z the Fiand. *Annaral investnaeiat expeit,es ar•e c{imged by tbe State Bo2rd ofluuestnae�at a�r�l�tie sEabject to cGnnge. Depending orJ your investment a�tian selectiotJ,�cco�mt values�u��flrrctuate with raarket ca�rditions. Consider your per�onal risk taleiance tuheia n��sking i�avestme��t decisdo�rs.Pnst�e�,for�ua��ce does�rotguam�atee firtr�re retrrnu. Whe� and how can I acces� the inoney�n pny account? � e • - � . • e - You can access your HCSP account for the reimbursement of eligible medical expenses when you separate from service at any age,retire,or are collecting a disability benefit • � � , � � � • � fi•om a Minnesota public employer. � � � _ � � , �� _� Only eligible medical expenses incurred after you leave public employment can be • � • � � � • � • • � reimbursed.You pay your out-of-pocket medical expenses,then submit to MSRS a ' Reimbu�sement Reqttest form along with appropriate documentation of the expenses. ' � � � � � � � Rei��tburse»eerzts are�tlways paid dif�ectly to yott.MSRS never p�tys the�ttedic�tl providet•or insure�: , . , , 1 �• -� - ' � � � � � �aat if I die�vith �noney�emain�n�in my acco�t? �' � '� - If there is a balance remaining in your account upon your death,it is transferred to an � � -� �-� . HCSP account for your spouse.If there is no spouse,then it is transferred to an HCSP account for your legal dependents.Reimbursements to a spouse or legal dependent(s) � � are tas free. � � � e If you do not have a spouse or legal dependent(s),}�our designated beneficiaries will � � inherit the rernaining account balance to use for the reimbursement of eligible medical - �- � • � expenses.If there is no designated beneficiaiy,the personal representative of your estate must name a beneficiaiy.Reimbursements to a beneficiary are subject to state and � � � , � �. federal income taa�es. We encourage you to designate a beneficiary,even if you have a spouse or legal dependent. , � •� -� � • � �� • I3oes my HCSP account irnpact my ability to have other t�-advantaged medical savi�gs plan�? � � � � • • � You may invest in multiple tas-advantaged savings plans such as a Health Savings Account(HSA),Health Reimbursement Account(HRA),or Flexible Spending Account(FSA);however,you cannot request reimbursement of the same expense from more than one savings plan or deduct a reimbursed expense on your federal income taY return. Special note regardin�Health Savin�s ��" � �'�;� � � _ 1�ccount� (HSAs) -� - .��, Access to yoatr HCSP is lzrriited to the reir�tburserrlerat of dentdl m•visiorr s� �� r � e�,pe�r�es ifyou co�at��Gute to�u HSA i��the s��ne e�le�rdrar ye�z•you�re ~�`M eligible to rteee�s yo�ur HCSP Gec�trise you left employtnent.Ple�r>e contact � �� MSRS for more det�rzl�. � �� 5i� �� ,� �, � � � � � I � � �_ ��' Health Care Savings Plan � � i!� � ��, ` � I � � , r �,• P Our Taac-gree Solntion ` � � � �� 60 Empire Drive,Suite 300 �� St.Paul,Minnesota 55103-3000 �;�..T� ; 651-296-2761 or toll-free at 1-800-657-5757 Core securities,when offered,are offered through GWFS Equities,Inc,and/or other broker dealers. G�C/I�S Equities,Inc.,n4einber I�INRA/SIPC,is:t�vholly owned suUsidiaiy of Gieat-V(/est LiFe&rlunuity Insurance Company. PT228764(07.15) zo+a_sut