REPORT TO THE CITY COUNCIL
FROM: SUMEET MALHI, Director
Personnel Services Department
BY: PHILLIP CARBAJAL, Human Resources Manager
Personnel Services Department - Benefit Administration
SUBJECT
Title
Approve the Fourth Amendment to the City of Fresno (City) Flexible Benefits Plan (Plan), to reflect changes in certain provisions of the Internal Revenue Service Code Section 125, Cafeteria Plan - Health Flexible Spending Arrangements to increase the maximum carryover amount and increase the contribution limitation and set minimum carryover limit amount. Also, authorize the City Manager or designee to execute all related Plan amendments.
Body
RECOMMENDATION
Staff recommends the City Council approve the Fourth Amendment to the Plan to include the recent modifications of the Code Section 125 Flexible Spending Account to allow an increase in the carryover amount in the health FSA program, increase contribution to statutory amount, and set a minimum carryover limit amount and authorize the City Manager or designee to execute all related Plan amendments.
EXECUTIVE SUMMARY
As the statutory amount under IRS Code Section 125(i) increases to adjust for cost of living, the City of Fresno's response in this amendment to the current plan will allow unused amounts in the Health Flexible Spending Account remaining at the end of the Plan Year to the subsequent Plan year, to carry overusing the statutory amount under Code Section 125(i). Also, the City of Fresno is setting a minimum carryover limit to counter the premium costs of those accounts that are not re-enrolling.
BACKGROUND
In 1992 The City of Fresno created a City of Fresno Premium Conversion Plan. That plan was restated and called the City of Fresno Flexible Benefit Plan July 1, 2002. The Flexible spending amounts allowed to be contributed from an employee in plan year 2024-2025 is $3,200 for unreimbursed medical expenses, and $5,000.00 for dependent care expenses, both s...
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