25A - AGMT FOR FLEX SPENDING - Laserfiche WebLink

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REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: OCTOBER 20, 2020 TITLE: APPROVE AGREEMENT WITH IGOE ADMINISTRATIVE SERVICES FOR SECTION 125 PLAN ADMINISTRATION AND FLEXIBLE SPENDING ACCOUNT SERVICES (NON -GENERAL FUND) /s/ Kristine Ridge CITY MANAGER CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER RECOMMENDED ACTION Authorize the City Manager to execute an agreement with IGOE Administrative Services to provide Section 125 Plan Administration and Flexible Spending Account Services to employees effective January 1, 2021 with a yearly automatic renewal and a three-year rate guarantee, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION On September 5, 2017, the City Council authorized the City Manager and Clerk of the Council to execute an agreement with Total Administrative Services Corporation (TASC), to provide Section 125 Plan Administration, Flexible Spending Account services, and Retiree Dental Billing, effective April 1, 2017 and until terminated. Keenan, the City's Benefits Broker, assisted in a market study to compare services and rates for Section 125 Plan Administrators and Flexible Spending Account providers. Two proposals were received from IGOE Administrative Services and Sterling Administrative Services. IGOE Administrative Services was selected to take over as the City's Section 125 Plan Administration and Flexible Spending Account Services. In the plan -takeover, IGOE Administrative Services will take over the administration of Section 125 Plan Administration and Flexible Spending Account Services from TASC effective January 1, 2021, with a yearly automatic renewal January 1, each year unless terminated effective upon thirty (30) days' notice to the other party. TASC will continue to provide administration of Retiree Dental Billing. The Section 125 Plan is part of the IRS code that enables and allows employees to take taxable benefits, such as healthcare benefits and convert them into nontaxable benefits. The City's Flexible Benefits Plan offers eligible employees to have pre-tax payroll deductions for certain healthcare and dependent care qualified expenses, and commuter expense reimbursement accounts. The City of Santa Ana currently has approximately 170 eligible employees participating in Section 125 Flexible Spending Accounts (FSA) per year. Employees enrolled in the FSAs can take advantage of dependent care FSA for an annual maximum of $5,000 for married couples filing taxes jointly and $2,500 for singles, and commuter expenses, such as public transportation fare and qualified 25A-1